The Ohio Casino Control Commission (OCCC) has issued fines to sportsbooks operated by DraftKings and PENN Entertainment for violating the state's advertising regulations. As of now, these violations will not impact either company's license for sports betting in Ohio, but they do represent an intent from the OCCC to crack down on any illegal activity while the state's gambling market is still in its infancy.
This decision to dock both DraftKings and PENN Entertainment was reached unanimously on Feb. 15 during a closed-door hearing. For now, the punishment will remain a financial penalty only. However, the OCCC expressed disappointment that there were three violations they needed to address in total. "We’re committed to our citizens and the necessary transparency for sports betting to occur safely,” OCCC Chair June E. Taylor said afterward to an assembly of reporters.
What did DraftKings and PENN Entertainment do exactly? Why is the OCCC cracking down on oddsmakers so hard and often? Will this have any impact on Ohio sports betting in 2023 or beyond?
Let's talk about it.
DraftKings Online Sportsbook is Now a Repeat Offender in Ohio
DraftKings actually needed to settle two separate matters in Ohio this past week. They were already on the hook for spotty advertising practices that occurred last month, and then there was the latest issue. Robert Linnehan of Saturday Down South broke it all down—including how much the violations will cost DraftKings:
"DraftKings settled two violations today and was fined $500,000. The commission issued one notice of violation last month after DraftKings failed to include a required responsible gaming message on one of its platforms. Additionally, the commission noted that the operator advertised promotions or bonuses that used the term 'free' or 'risk-free' when patrons were required to incur a loss or risk their own money to obtain the promotion. This resulted in a $150,000 fine for the operator. The second violation stemmed from DraftKings mailing out approximately 2,500 advertisements directly addressed to individuals under the age of 21. This resulted in a $350,000 fine for the operator."
Officials from DraftKings who were present at the hearing did not contest the OCC's decision and instead offered an apology. “We want to emphasize that we take these issues very seriously and that ensuring safe and responsible play is what truly underscores all of our efforts,” Stephanie Sherman, the Chief Marketing Officer for DraftKings, said afterward.
While these fines are a drop in the bucket for a company as large and ubiquitous as DraftKings, their admittance of guilt is seen as genuine. And it suggests that they inadvertently violated Ohio sports betting advertising regulations. They have since remedied the problematic language, and the OCCC figures to monitor their practices extremely closely.
PENN Entertainment Fined for Ads that Targeted College Students
Similar to DraftKings in January, PENN Entertainment was ultimately fined for a wave of advertising that targeted college campuses and, thus, an audience of people under 21. Linnehan once again provided the details for Saturday Down South:
"The violation, sent to Penn Sports Interactive as part of its Barstool Sportsbook brand, stemmed from a Nov. 15, 2022, Barstool College Football show which took place 'on, or targeting the area of, the University of Toledo’s Campus.' During the show, the violation notice alleges that Barstool advertised the Barstool Sportsbook by promoting pre-registration for the sportsbook, including bonus cash and 'mycash' rewards for PENN Entertainment casinos. It also said Barstool targeted individuals under the age of 21 in the same way during the show."
Much like DraftKings, officials from PENN Entertainment who were present at the February hearing did not contest the findings. They will pay a fine of $250,000 and offered an apology to a group of assembled media. "We recognize that we have violated the Ohio regulations and Ohio law regarding this," Chris Soriano, the Chief Compliance Officer for PENN Entertainment, said. "We admit that we have fallen short of the mark and we regret that this has taken place."
Ohio Continues to Crack Down on Online Sportsbooks
More than most states, Ohio has stringently monitored the activity and advertising of online sportsbooks. In fact, since sports betting launched on Jan. 1, they have issued six violations and fines totaling more than $1 million.
This comes as know surprise if you read the writing on the wall prior to the New Year. The state expressed disdain for the bombardment of gambling advertisement placed ahead of the Ohio sports betting launch. They are now following through by ensuring licensed companies follow their sports betting policies to the letter.
Some don't believe this is a smart approach to take. They think it could discourage some of the most highly reviewed online sportsbooks from wanting to operate in the state of Ohio.
To be honest, we disagree. Ohio lawmakers were incredibly concerned about the impact advertising practices and legal sports betting in general would have on gambling addictions inside the state. Insisting on ultra-specific language for online sportsbooks as well as strict advertising guidelines was critical to swaying offices from the House and Senate who were on the fence about the bill. These policies were also a hallmark of how the last Ohio sports betting bill was portrayed to voters. It makes sense that the OCCC is enforcing the guidelines early—and often.
Heck, given how many states have expressed concern about the relationship between legal online sportsbooks and the rise of gambling addiction, Ohio's crackdown on advertising practices may wind up catching on throughout the rest of the USA.
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