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Jake Paul, the celebrity professional boxer and co-founder of sportsbook operator Betr, could face scrutiny over his gaming licenses in Ohio and Massachusetts after reaching a settlement with the U.S. Securities and Exchange Commission for promoting cryptocurrency without disclosing he was paid to do so.
“Jake Paul has applied for a key sports gaming employee license,” Ohio Casino Control Commission (OCCC) spokeswoman Jessica Franks told VIXIO GamblingCompliance via email.
“He was issued a provisional key sports gaming employee license by the commission in December 2022, which was renewed earlier this month as permitted under OAC 3775-4-99(H) while the commission continues its probity investigation.”
Last week, Paul, 26, agreed to pay $101,887 to settle the SEC’s charge that he violated securities laws by promoting on Twitter a crypto-asset security that was being offered by Tron Foundation Limited called Tronix tokens.
In exchange for promoting the crypto-asset security, Paul was paid approximately $25,019, according to the six-page SEC order. Paul, at the time of his promotion, had approximately 3.8m Twitter followers.
Paul did not disclose that he was being paid to give publicity to such security by the entity offering and selling it to the public.
Paul’s failure to disclose this compensation violated Section 17(b) of the Securities Act of 1933, which makes it unlawful for any person to promote a security without fully disclosing the receipt and amount of such compensation from an issuer.
Franks told VIXIO that suitability is an ongoing requirement for all Ohio sports-betting licensees and applicants, and the commission has the authority to reopen a licensing investigation at any time.
“The commission is aware of the recent action taken by the SEC against Mr. Paul, and will follow our standard process in reviewing the allegations and settlement,” Franks said.
“The commission will not prejudge any outcome, and any action taken by our agency will be done in accordance with Ohio laws, rules and the administrative hearing process.”
Betr has not responded to an email seeking comment. Paul is also listed as Betr’s president on the company’s website.
Based in Miami, Betr is a company that specializes in microbetting, which are in-play wagers that allow gamblers to bet on multiple events within games, such as whether the next pitch will be a strike or will a basketball player make a free throw.
Betr is also currently licensed in Massachusetts and Virginia.
Jennifer Mullen, a spokeswoman with the Virginia Lottery, confirmed Tuesday (March 28) that Paul is licensed in Virginia but “any investigations would be private, so I would not be able to share any further details.”
Betr was licensed in Virginia on March 3, 2023.
Thomas Mills, a spokesman with the Massachusetts Gaming Commission (MGC), confirmed that Betr has reached out to the Investigations and Enforcement Bureau (IEB) to inform them of the issue. He said the next step was for the IEB to inform the five-member commission.
“Mr. Paul is a qualifier for Betr’s sports wagering license as an owner and CEO, which means he has a continuing duty to maintain suitability and Betr must update the MGC’s Investigations and Enforcement Bureau within 10 days of ‘any arrest, indictment, charge or criminal conviction of any qualifier in any jurisdiction,’” Mills said.
