It’s time for Ohio sportsbook operators Barstool and DraftKings to pay the piper.
In a Feb. 15 meeting, both companies accepted fines the Ohio Casino Control Commission previously levied on them for violating advertising rules.
Barstool is owned by PENN Entertainment. Both PENN and DraftKings were notified of violations in December, before Ohio sports betting went live. The companies chose not to appeal the charges, waiving their right to a hearing before the Feb. 15 meeting.
Barstool event violated Ohio sports betting advertising rules
PENN accepted a fine of $250,000 for promoting the Barstool Sportsbook Ohio app during an event aimed at college students, many of whom do not meet the age requirement for gambling in Ohio. The Barstool College Football Show took place near the University of Toledo in November.
The company’s VP and chief compliance officer, Chris Soriano, apologized for the misstep at Wednesday’s meeting:
“We accept responsibility for that by reading the advertisement during the Barstool College Football Show. We recognize that we have violated the Ohio regulations and Ohio law regarding this, and again we admit that we have fallen short of the mark. We regret that this took place.”
PENN reps said their future Ohio events will be 21 and up.
DraftKings receives even steeper fines in Ohio
The commission has now hit DraftKings Sportsbook Ohio with fines on two separate occasions, totaling $500,000.
In November, DraftKings allegedly mailed ads to individuals under 21. The sportsbook was fined $350,000 for that violation in December.
When issuing the fines against the company, OCCC executive director Matthew Schuler commented:
“The commission has been very clear about the rules and standards for sports gaming advertising with the industry, and are disappointed with the lack of compliance we have seen despite reminders. While we do not take administrative action lightly, DraftKings’ conduct in this case warrants the Commission’s intervention to ensure the integrity of sports gaming.”
In addition, the commission fined DraftKings $150,000, accusing the company or an affiliate of breaking two other rules. For one, problem gambling messaging wasn’t conspicuous enough in their ads. In addition, promotional bet credits were described as “free” when they actually required a deposit or a bet be made first.
A DraftKings representative also appeared at the Feb. 15 meeting, respectfully accepting the fine and articulating the company’s dedication to responsible advertising.
A series of infractions kicked off Ohio’s first month
In total, four Ohio sportsbook operators have been fined by the OCCC for violating advertising and other rules.
Caesars Sportsbook Ohio recently accepted a fine for similar violations as DraftKings. At January’s OCCC meeting, a Caesars representative said they’ve ended their relationship with the marketing affiliate that was responsible for the violations.
BetMGM Sportsbook faces the same penalties. Their violation is still pending with the commission.
Ohio Governor calls for tax increase in response to violations
In a budget proposal released last week, Ohio Gov. Mike DeWine proposed doubling the tax rate on Ohio’s sportsbook operators. The increase would need to be approved by General Assembly to go into effect.
The current tax on casinos, sports teams and operators that offer sports betting is 10%. A 20% tax would be the highest rate outside of the northeast region, where states like New York tax as high as 51%. Tennessee is the only state outside of the northeast taxing 20%.
The governor took aim at Ohio sportsbooks in the proposal, calling for better compliance with advertising rules. DeWine also broached the topic of bettors who allegedly threatened or harassed college athletes. He instructed the OCCC to ban anyone accused of the behavior from gambling in the state.
In August 2022, the Ohio General Assembly approved a sports gaming involuntary exclusion list. Violating sports betting laws will land perpetrators on the list and bar them from gambling in Ohio.