Suitability Screening, Advertising In Focus For Key U.S. Sports-Betting States

October 5, 2022
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Maryland now expects to beat Ohio to the launch of mobile sports betting before the end of the year, but regulators told a VIXIO webinar that not all applicants are likely to make it to the starting line in either state as they undergo full compliance and background scrutiny.

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Maryland now expects to beat Ohio to the launch of mobile sports betting before the end of the year, but regulators told a VIXIO webinar that not all applicants are likely to make it to the starting line in either state as they undergo full compliance and background scrutiny.

Speaking on VIXIO GamblingCompliance’s Meet The Regulators webinar on Tuesday (October 4), Maryland Lottery and Gaming director John Martin said the state’s first online sportsbooks could go live as soon as late November as a series of critical milestones approaches.

Martin expects his agency to deem various mobile betting license applicants qualified during an October 27 meeting, or less than one week after the October 21 deadline for companies to apply for up to 60 mobile and 30 retail sports wagering licenses available under a 2021 state law.

How soon those qualified operators will go live will then depend on when the independent Sports Wagering Application Review Commission (SWARC) reviews the details of their applications and deems them worthy of a license. The lottery and gaming control agency would then also have to review internal controls and other technical matters before allowing the operator to launch.

If SWARC can approve the applications in early November then there is no reason mobile sports wagering cannot launch before the end of the month, if not mid-December, Martin said.

“But I am confident there will be mobile wagering in the state of Maryland in 2022,” he said.

Maryland is one of three key pending online sports-betting markets where operators and suppliers are currently involved in or preparing for a licensing process.

Regulators in Ohio have already set a definitive launch date of January 1, 2023, and are laser focused on getting to that point, said Matt Schuler, executive director of the Ohio Casino Control Commission.

License applicants all face a November 2 deadline to submit various materials, procedures and technology for review and approval by the commission.

More experienced casino and multistate operators seem to be having few difficulties sticking to the commission’s timeline, but Schuler suggested others may not be able to go live on day one.

“All applicants need to keep pace; be timely, thorough, responsive — or we’re just going to have to leave them on the sidelines and pick them up sometime next year,” Schuler said.

Dealing With Inexperienced Applicants

In including standalone retail sportsbooks, sports teams, and wagering kiosks for bars at other locations, the Ohio legislature took the policy decision to establish an “open field” for the state’s sports wagering market, Schuler told VIXIO webinar attendees.

The Ohio regulator noted how the commission has since received a range of “outrageous” inquiries from less experienced applicants, including those asking to submit their New Jersey application forms in Ohio, questioning the purpose of internal controls, and warning that their owners were unwilling to undergo fingerprinting as part of the license process.

Those less experienced operators, if they are approved, will all have to be held to the same standards as casinos and other established industry players, because that is what is required by law, Schuler warned.

“These applicants … are going to have to take the words that they are putting on the page and put them into action every day to make sure that they are ensuring integrity for Ohio citizens who might use their product,” he said.

“It’s been a real challenge, and time will really tell; we’ll see how this all shakes out with what I consider to be a rather large experiment in opening this up, in Ohio at least, outside of the traditional gaming industry.”

Martin sees a similar situation in Maryland, where the legislature decided to make a large number of licenses available and set certain other criteria to encourage participation by minority- and women-owned businesses.

Maryland regulators are mindful that inexperienced operators deserve an opportunity to get their start in the industry.

But, just like in Ohio, each applicant will have to undergo a full gaming regulatory background review, and some may be surprised at its invasiveness.

“It will be interesting to see, once we get through this next phase at the end of October and go into the actual awarding phase, how many of these folks still will pursue the process,” Martin said.

Martin and Schuler were joined on Tuesday’s webinar by Cathy Judd-Stein, chair of the Massachusetts Gaming Commission (MGC).

Asked about the expected launch date for retail and mobile sports wagering in her state, Judd-Stein advised attendees to “stay tuned” for the MGC’s formal public meeting this Thursday (October 6).

The commission’s meeting agenda, also published on Tuesday, includes votes on a staggered launch approach and potential launch dates for retail and mobile sports wagering, as well as votes to approve draft licensing forms for operators and vendors.

Advertising In Focus

The three regulators also addressed their states’ expectations on advertising and responsible gaming, which is a key tenet of Massachusetts’ legislation in particular.

By statute, the MGC is mandated to adopt regulations requiring operators to prevent and address problem gambling, while also prohibiting “any form of advertising, marketing or branding that the commission deems unacceptable or disruptive to the viewer experience at a sports event.”

After seeing a flood of sports-betting ads even before legalization, the MGC expects to hold a future roundtable to explore local, regional and national media markets and the feasibility of putting limits on the “intensity and frequency” of advertising in Massachusetts, Judd-Stein said.

“It may well be that our powers and authority are quite limited, but that certainly is top of mind.”

In Maryland, Martin said that regulators do not have a mandate from the legislature to address the frequency of advertising — “at least not yet” — and will instead be watching to see if the industry fulfils a promise to appropriately self-regulate its marketing activities.

The Ohio commission, meanwhile, does have broad authority over the content of advertising but similarly not the frequency.

“And I think it’s the frequency that might end up being the problem,” Schuler warned.

Although a marketing “frenzy” is expected upon the launch of the state’s sports-betting market, Schuler said it would be the industry’s actions that determine whether lawmakers or regulators need to impose future restrictions.

Schuler advised marketing departments to work alongside compliance teams in evaluating their advertising, “because getting noticed and being interesting doesn’t always coincide with the guardrails the [Ohio] General Assembly put together.”

“What we do not want to see in Ohio, or in the United States, is an environment that begs for correction like we’ve seen in the UK or other parts of Western Europe.”

To watch an on-demand recording of VIXIO GamblingCompliance’s "Meet The Regulators" webinar with chief regulatory officials responsible for implementing sports betting in Maryland, Massachusetts, and Ohio, click here.

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