Ohio Operators Improving Compliance With Sports-Betting Rules

August 6, 2023
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After a rocky start that included over $1m in fines before the state’s sports-betting program was a week old, Ohio’s top gaming regulator says compliance with the state’s advertising rules has improved.

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After a rocky start that included over $1m in fines before the state’s sports-betting program was a week old, Ohio’s top gaming regulator says compliance with the state’s advertising rules has improved.

Matt Schuler, executive director of the Ohio Casino Control Commission (OCCC), credited operators with helping to clean up some of the early mistakes in marketing the new sports-betting program.

The commission issued $150,000 penalties to BetMGM, Caesars Entertainment and DraftKings in January for failing to include proper problem gambling messaging in advertising, and in an interview with VIXIO GamblingCompliance shortly thereafter, Schuler pointed to affiliate marketers as “the weakest link in [the] chain” in meeting the state’s advertising requirements.

In an interview last week, however, Schuler said that since then, no such issues have come across his desk, and no new fines have been issued.

“The operators have gone to significant efforts to train their affiliate marketers to make sure that they understand the very clear requirements of Ohio law, and in some cases have terminated relationships with affiliate marketers who were not upholding the standards,” Schuler said.

“And so, I think there is a much better understanding of everyone in the advertising continuum of what Ohio requires and the affiliate marketers who want to continue to do that kind of business for the sportsbooks are adhering to that.”

The commission also issued a $350,000 fine to DraftKings in December for sending mailers to people under the age of 21, as well as a $250,000 fine to Penn Entertainment for promoting sportsbooks on a college campus.

Advertising issues were one of the biggest stories in the early days of sports betting, with Republican Governor Mike DeWine criticizing the barrage of advertising the state saw as operators battled for market share, deploying more than $319m in promotional credits in January alone to do so.

Since then, the advertising barrage has subsided, although a new blitz could be forthcoming as the state enters its first full football season since launching legal sports betting.

“If there’s a normal, I think we have reached it, because just anecdotally, whether it’s me or my staff are not getting angry complaints from folks that are saying they can’t turn on anything without hearing a sportsbook ad,” Schuler said.

“While it may irritate some, as long as they’re following the advertising laws, the commission has no issue, because the law gives us no authority on volume, just the content,” he added about a potential uptick for football season.

One area where the commission did have an issue with content was marketing issued by Fanatics offering its sports apparel customers a bonus bet that matched their retail spending, as an incentive to open a sports-betting account with the new Fanatics Sportsbook.

The Ohio commission quickly put a halt to the promotion, and later issued a directive and proposed new regulations that prohibit any gaming inducements resulting from a non-gaming transaction.

Schuler said the Fanatics situation did bring the dynamic to their attention, but regulators' concern about the issue was not just limited to Fanatics.

“I will say Fanatics was very responsive and understanding to our concerns, but they weren’t the only ones who were doing that,” Schuler said.

The issue, Schuler said, is that operators cannot prevent targeted marketing to self-excluded individuals through such targeted non-gaming marketing.

“The challenge is if you’re ordering an Uber, and for no other reason than you order the Uber, you get a pop-up message that says spend five [dollars], get $100 in bonus bets and you’re on the voluntary exclusion list, that’s a problem,” he said.

“When you have a third-party who is not even involved in gaming offering a gaming inducement, and it is about promotions, it’s not just about advertising, there’s no way to mitigate the risk that you’re going to violate the law and do the very thing it prohibits.”

The state has already seen significant changes to its sports-betting program, after the legislature doubled the sports-betting tax rate from 10 percent to 20 percent of gross revenues in the state budget this year, amid other changes.

Operators have reported more than $539m in taxable revenue in the first half of 2023, with 18 online operators doing business in the state by the end of June.

Schuler said that the one provision that the legislature included in the budget, that the commission itself pushed for, was a statutory change giving the commission specific authority to place individuals convicted of threatening sporting-event participants for reasons related to gambling on an involuntary exclusion list.

However, he told VIXIO that the law is specifically and narrowly defined to only include threats, not harassment or social media insults, and such an exclusion would only take place after a person is charged and convicted of a crime, rather than proactive enforcement by the commission.

“We don’t want to cross a line that puts the commission into being a force that is roaming social media to [find] people harassing,” Schuler said. “If an individual who can be identified commits an act that is already illegal under Ohio law, should that happen, the commission can then choose to place them on the involuntary exclusion list as another measure.

“A number of folks out there, I think, are under the impression that if anyone says anything bad about an athlete, then the commission is going to place them on the list,” he continued. “That’s not what the law says, and we don’t have authority to do that, nor would we.”

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