Ohio sports betting operators hit with fines totaling $1M, regulator issues warning

Sports betting is off to a great start in Ohio. The new industry, which debuted on January 1, was the busiest regulated market in the US over the New Year’s holiday weekend, recording 11.3 million geolocation transactions through January 1 and 2. But despite these early achievements, Ohio’s sports betting operators have also made the news for an entirely different – and less positive – reason: violation fines, which have already gained them a warning from Gov. Mike DeWine.

As looming fines start to stack against some Buckeye State sports wagering operators, Ohio’s gambling regulatory agency has now also tackled the issue, stating it is “closely” watching all licensees for transgressions. Jessica Franks, director of communications for the Ohio Casino Control Commission, said that several licensees did not take proper action after general warnings went out about advertising breaking state law and commission rules.

“We have been very disappointed that for all of the talk that the industry has about wanting to ensure that only those over the age of 21 can place a wager, and that they’re not targeting folks that they shouldn’t, their actions right now don’t seem to be really matching up with the words,” Franks said in an interview with NBC4. “The commission takes this really seriously. We would like the industry to do the same.”

The failures have led to threats of fines levied at four sports betting companies, totaling more than $1 million thus far – some of the heftiest penalties the commission has ever issued. However, Franks notes that no breach has reached, at least so far, a level where the regulator would pull a proprietor’s license.

Jessica Franks

On Thursday, the commission sent notices to the licensed service providers of BetMGM, Caesars and DraftKings, or their marketing affiliates: the regulator alleges all three advertised across platforms without visible mandatory problem gambling messaging. Additionally, other ads also promised potential bettors “risk-free” promotions and bonuses if they put a certain amount of money down. The notices warned each of a $150,000 fine.

These new notices add to a series of warnings and potential fines over the last few weeks that Yogonet has already reported on. In the case of DraftKings, the sports gaming giant was accused in late December of sending around 2,500 mailer ads to residents under the age of 21. The company is currently staring down $500,000 total in possible fines, with the $350,000 penalty over the mailing failure being the biggest in the Casino Control Commission’s history.

Barstool Sports joins the three aforementioned operators as the fourth business on notice over sports betting compliance failures. The commission issued a notice in mid-December to Penn Entertainment, Barstool’s parent company, for alleged violations stemming from an in-person episode of Barstool’s College Football show. The business faces a potential $250,000 fine for violating the state’s rules prohibiting sports gaming marketing targeting college students. 

All four sports betting operators have been given the choice to either request a hearing or settle the matter directly with the commission, which is set to vote on the final outcome. Hearing requests must be made within 30 days of receiving a violation notice. Penn Entertainment has already requested a hearing, Franks told NBC4.

“We need to make sure that the fines are at a level that it’s not just a cost of doing business,” Derek Longmeier, the executive director of the Problem Gambling Network of Ohio, told the cited source. “I think it’s very clear that the commission is done with talking, that they want to see action.” Both Longmeier and Franks argue fines have to be substantial enough to avert a situation where proprietors brush off the penalties.

“The sports gaming industry has received multiple reminders of the rules and standards for advertising and promotions, yet continues to disregard Ohio law,” said Matthew Schuler, executive director of the Ohio Casino Control Commission, in a press statement last week. Any money resulting from the fines will pour into the sports gaming revenue fund, most of which is allocated toward education. Two percent goes toward problem gambling resources.

The new developments come a few days after Ohio Governor Mike DeWine said he has taken a personal interest in enforcing state regulations for advertising by gambling companies. In his first comments on the subject since the launch of legal sports betting in the Buckeye State on New Year's day, DeWine said the companies that are doing massive advertising “need to be aware that they’re being looked at very closely.”