It’s quickly becoming clear that the Ohio Casino Control Commission (OCCC) – is playing hardball with operators. The Buckeye State’s nascent sports betting market launched on New Year’s Day. Almost immediately, the OCCC put several operators on notice with hefty fines and application denials.
That’s an unusually strict start, given that other US regulators have historically had a lighter touch.
The OCCC began by issuing a $350,000 fine to DraftKings for directly advertising to about 2,500 individuals under 21. Shortly after that, Penn Sports received a fine of $250,000. Penn, the parent company of Barstool Sports at Hollywood Casino, had hosted a pregame show at the University of Toledo campus. The OCCC determined that this amounted to marketing targeted at underage bettors.
A press release sent out by the OCCC on Jan 5 revealed that DraftKings will be receiving another fine shortly for misuse of terms like “free” and “risk-free.” Also on the hook this time are BetMGM and Caesars.
Six-figure fines for online operators have been rare in other states. New Jersey, for instance, has had online gambling for nearly a decade, but most fines its Division of Gaming Enforcement has issued have been in the thousands or tens of thousands. Notable exceptions include a $100,000 fine to NYX Gaming in 2019 for operating unlicensed games and $150,000 to DraftKings last year for allowing proxy betting.
Another would-be operator, PlayUp, didn’t even make it into the market. The company received a cease-and-desist from the commission about its Slots+ product, which the OCCC deems illegal. As a result, PlayUp was denied its license, though it has requested a hearing to challenge that decision.
Meanwhile, Jessica Franks, the commission’s Director of Communication, says that the OCCC twice issued guidance about advertising and responsible gambling messaging in the weeks before launch. Governor Mike DeWine himself has warned operators to take that guidance seriously.
A Strict Start is For the Best
It’s a breath of fresh air to see the OCCC planting its feet firmly at the very start of the legal market. A zero-tolerance approach with the Governor’s backing is the best way to ensure operators know what to expect from the beginning and continue to adhere to it as they grow. After all, the Ohio sports betting market is projected to take more than $8 billion in bets this year. Once the industry hits numbers like that, putting the genie back in the bottle can be tricky.
Elsewhere, we’ve seen the consequences of regulators being too permissive or slow to act. Often it leads to over-correction further down the line.
Take the United Kingdom, for example. It’s the most established and largest regulated online gambling market in the world. It took a relaxed approach at first, but the industry failed to rein itself in. As a result, it has now transformed into one of the world’s strictest markets. Many operators have been unable to adapt to the changes and are struggling to continue operating in the UK market. That highlights the importance of crafting sustainable regulations from the beginning.
The UK Crackdown: a Cautionary Example
Some of the UK Gambling Commission’s most controversial changes, enacted in 2021, include the outright ban of four main slot features:
- features that speed up play or give the illusion of control over the outcome
- slot spin speeds faster than 2.5 seconds
- auto-play options
- sounds or imagery suggesting a “win” when the return is equal to or less than the wager
It’s tough for established operators to adapt to these new rules when most of their existing repertoire of games includes such features. The industry and the British public alike would have been better served by more moderate restrictions consistently enforced from the start.
Similarly, the UKGC’s new restrictions on advertising amount to a ban on the industry’s most common strategies. For example, a regulation aimed at reducing the appeal of gambling ads to minors includes a prohibition against featuring “a person or character […] who has a strong appeal to those aged under 18, such as sports people and celebrities.”
More examples can be found in the UKGC’s complete advertising and marketing rules.
What’s Next For Ohio Sports Betting Regulation?
These first weeks of legal online sports betting in Ohio likely set the tone for things to come.
Expect a strict, zero-tolerance regulated market across the board, with a close eye kept on advertising and marketing in particular. This is the best approach for a rapidly growing online gambling industry. However, it may require an adjustment period for operators, especially US companies who haven’t already experienced crackdowns overseas.
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