The Ohio Casino Control Commission (OCCC) has issued a notice of intent to deny a mobile sports wagering license to PlayUp and proposed fining Penn Entertainment $250,000 for advertising violations by Barstool Sportsbook, executive director Matthew Schuler said.
During a commission meeting on Wednesday (December 14), Schuler said potential illegal gambling activity was discovered as OCCC staff was investigating PlayUp during the license suitability process. The notice of intent to deny the company a license also included a cease and desist order to both PlayUp and technology partner Potent Games.
“Both are in the steps to comply with the notice,” Schuler said. “PlayUp has requested a hearing.”
As of late Wednesday, no hearing involving PlayUp or Potent Games had been scheduled.
The OCCC’s two-page notice dated December 2 alleges PlayUp accepted illegal wagers from Ohio residents through its Slots Plus mobile app, including from slots, contests, lottery and virtual sports.
According to Ohio’s sports-betting law, an applicant for a license can be denied if they have “been directly involved in or employed by any offshore wagering market that illegally serviced the United States or otherwise accepted illegal wagers from individuals located in the U.S. on or after April 16, 2015.”
By accepting wagers on Slots Plus, the OCCC notice alleges that PlayUp violated Ohio laws on bookmaking, offering games of chance and operating unlicensed casino gaming. The company was also accused of engaging in false, deceptive, misleading or otherwise impermissible advertising.
PlayUp offers mobile wagering on sports, horseracing and daily fantasy sports and advertises on its website that consumers can also play slots on their phone in more than 25 U.S. states, but notes that racebook is only offered in Ohio.
PlayUp says that its Slots Plus games operate under the pari-mutuel gaming laws of the United States.
“All our daily games are matched up with a real live event in the U.S., and all of your wagers are going into live parimutuel pools,” the company writes in the help section of its website. “By doing this, we’re following all applicable pari-mutual gaming laws in the U.S., making every wager you make legal.”
“As long as you’re physically located in a state where pari-mutuel wagering is legal you can wager and win with us,” the company says.
Messages left with IG Acquisition Corp. were not returned Wednesday. IG Acquisition is a special purpose acquisition company (SPAC) that agreed to merge with PlayUp in September in a deal that valued the online gaming company at $350m.
The deal is expected to close in the first quarter of 2023. PlayUp operates online betting and fantasy sports in Australia, New Zealand and India, with U.S. licenses for sports wagering in New Jersey and Colorado.
PlayUp was not the only gaming company to receive a regulatory notice from the Ohio Casino Control Commission in recent weeks.
Schuler on Wednesday said regulators have informed Penn Sports Interactive (PSI), doing business as Barstool Sports, that the company will face a $250,000 fine for alleged violations of commission regulations prohibiting advertising at Ohio colleges and universities as well as advertising to people under 21.
On November 15, 2022, Barstool hosted the Barstool College Football Show on, or targeting the area of, the University of Toledo’s campus.
During that show, Barstool advertised the Barstool Sportsbook by promoting pre-registration for its sportsbook app and “mycash” for Penn Entertainment casinos related to sportsbook pre-registration. Those ads were also aimed at people under 21, regulators said.
“PSI’s advertising failed to comply with Ohio law,” Schuler wrote in the three-page notice.
The commission said it will seek a $250,000 fine and require the company to ensure that its employees are trained in all laws, policies, and procedures relevant to advertising and promoting sports betting.
Barstool already has been granted conditional licensing approval for sports betting by the OCCC.
“We look forward to the opportunity to address this directly with the Ohio Casino Control Commission through its regulatory process,” Penn Entertainment said in a statement. “Other than that, we do not comment on pending regulatory matters.”
The OCCC will eventually vote on any final action to be taken against PlayUp or Penn.
Should the Barstool fine be approved at $250,000, it would be the largest fine imposed on a sports-betting company outside of Nevada since the federal ban on expanded sports wagering was overturned in May 2018.
As things stand, the largest fines issued against sportsbook operators have been $150,000.
The New Jersey Division of Gaming Enforcement (DGE) required DraftKings to pay a $150,000 settlement in March after several incidents of the company breaching proxy betting rules in 2019 and 2020. WynnBet also agreed in 2021 to pay Virginia regulators $150,000 to settle a complaint that it violated geofencing rules.
The six-member Ohio commission on Wednesday also approved four more sports betting operators for the state's January 1, 2023 market launch, bringing the total of conditionally approved mobile sportsbooks to 20.
Those operators approved Wednesday were BallyBet, which will launch mobile and retail through the National Football League’s Cleveland Browns, Betway, which will operate a second-skin mobile app through Boyd Gaming’s Belterra Park, and Out The Gate, which will launch mobile and retail sports wagering through the SPIRE Institute.
Underdog Sports was similarly approved to launch mobile wagering through a market-access partnership with Major League Baseball’s Cincinnati Reds.
Schuler took a moment at the start of the meeting to dismiss recent media reports the OCCC had considered moving up the January 1 start day for sports betting to accommodate gamblers' interest in wagering on Ohio State against Georgia in one the College Football Playoff Semi-final games on December 31.
Schuler said that January 1 remains the launch date for Ohio’s three license categories.