FanDuel, Fanatics Oppose Ohio’s Proposed Marketing Restrictions

December 20, 2023
The Ohio Casino Control Commission's 2024 agenda is set to include updated amendments to its promotional and bonusing regulations that would restrict how operators offer inducements connected to non-gaming transactions.

The Ohio Casino Control Commission's (OCCC) 2024 agenda is set to include updated amendments to its promotional and bonusing regulations that would restrict how operators offer inducements connected to non-gaming transactions.

However, both Fanatics Betting & Gaming and FanDuel have submitted comments to the commission expressing their concern that the proposed amendments to Ohio Administration Code 3775-16-09 could negatively impact their business in the state.

The latest version of the proposed regulation, which was released last month, would ban online sports-betting operators from offering bonuses tied to a non-gaming transaction, unless the offer meets certain criteria, including that the customer has been age-verified.

Licensees must also be sure any offer does not target individuals under the age of 21, other ineligible individuals to participate in sports betting, individuals with gambling problems, or other vulnerable individuals.

Cory Fox, FanDuel’s vice president of government affairs and product counsel, said the proposed verification requirement for a recipient of a bonus or promotion offer in connection with a non-gaming customer was “unprecedented and is unmanageable in practice.”

“Sports gaming proprietors have all account holders engage in a thorough know-your-customer process at the time of account creations,” Fox wrote in a three-page letter dated November 30, 2023 and addressed to the commission's executive director Matt Schuler.

“This process is specifically designed to ensure that all account holders are at least 21 years old and not participating in the voluntary exclusion program.”

Fox stressed that it is not feasible for that same level of verification to be applied to individuals engaged in non-gaming consumer transactions, especially with a third party.

“Requiring such a standard would, in effect, be a blanket ban on sports gaming proprietors partnering with third-party business in Ohio to provide promotions to their customers,” he added.

Fox also sought clarification from Ohio regulators on how directly related the non-gaming transaction must be to the promotion or bonus to trigger the age and identity verification requirements under the proposed rule.

In preferred edits to the proposed amendments submitted to the commission, Fox added the word "directly" to 3775-16-09 Section G to instead read: “Sports gaming proprietors must not offer a promotion or bonus ‘directly’ in connection with or ‘directly’ as a result of a non-gaming, consumer transaction.”

The new rules arose, in part, in response to a promotional offering by Fanatics in May, during its beta launch in Ohio.

The company offered its core sports merchandise customers a free bet on the Fanatics Sportsbook equal to the cost of their merchandise purchase.

The OCCC quickly registered its disapproval of the promotion, and it was swiftly removed from the Fanatics site.

Fanatics Betting & Gaming also raised similar concerns to Flutter's FanDuel in a six-page letter submitted to the OCCC.

“[Fanatics] has previously noted to OCCC staff the company’s strong belief that executing on a marketing strategy that focuses on speaking to Fanatics customers where they engage with Fanatics businesses is not just a sound business decision, but a more responsible means of marketing,” the company stated.

The company also reminded regulators it has previously shared statistical information with the OCCC demonstrating that Fanatics customers are overwhelmingly 21 or older, and “a significant percentage of those customers are interested in or currently engage in sports wagering.”

“If the contemplated rule revisions are implemented, to compete in the Ohio market, [Fanatics] will shift marketing resources towards other mediums (i.e., TV, out of home) where a higher percentage of minors and voluntary exclusion program participants, the very people the OCCC is seeking to limit exposure for, will view [Fanatics'] offers,” the letter states. 

As of Tuesday (December 19), the OCCC was in the process of reviewing the letters submitted by FanDuel and Fanatics. 

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