The Ohio Casino Control Commission is looking to crack down on daily fantasy sports websites that offer wagering options that resemble player proposition bets offered by sportsbook operators.
At the OCCC’s monthly meeting in May, executive director Matt Schuler said that the commission is investigating some fantasy sports operators for illegally offering sports betting.
“In every part of gaming that we regulate, there are always challenges with skill games — it’s illegal casinos masquerading as games of skill,” Schuler said about the offending fantasy sports sites at the OCCC’s May 17 meeting.
Legal sportsbooks in Ohio launched on Jan. 1. The OCCC regulates and licenses both sportsbooks and fantasy sports sites, which operate under distinct rules and regulations. (The OCCC first began granting licenses to fantasy sports sites in 2020.)
As with sports betting, OCCC regulates fantasy sports sites
To engage in sports betting in Ohio, individuals must be 21 or older, but fantasy sports contests are open to those 18 and up. There are 18 daily fantasy sports companies licensed to operate in the state.
Ohio sportsbook licenses are also considerably more expensive than the licenses required to operate a fantasy sports site in the state.
The cost of a fantasy sports operating license ranges from $3,000 to $30,000, depending on the number of users the site attracts.
According to the American Gaming Association, initial online sportsbook licenses (Type A licenses) can cost anywhere from $500,000 to $2.5 million.
To legally offer the kind of player prop bets the OCCC is accusing some fantasy sports sites of currently allowing, those site operators would have to pony up (and be approved) for a Type A sports betting license.
Some fantasy sports sites accused of offering prop bets
At the May OCCC meeting, commissioners were shown a presentation in which examples of fantasy sports sites offering wagers akin to sportsbooks’ player prop bets.
Bets on individual player performance — such as how many yards a quarterback will throw for or how many hits a baseball player will have — are prohibited by Ohio law for fantasy contest operators.
While fantasy sports sites cannot legally offer them, Ohio sportsbooks can and do offer an array of player prop bets.
“These contests,” Schuler said of the offending fantasy sports sites, “they offer proposition wagers — which are part of sports gaming — against the house, but (fantasy sports site operators are) trying to call them fantasy contests.”
OCCC sends cease-and-desist letters to offending sites
Schuler said there is “an army” of fantasy sports sites offering such player prop bets across the country and that the OCCC regularly scans to see which ones are operating in Ohio.
Schuler said it appears that some of the fantasy sports operators seem to think they can fly under the radar in Ohio.
“Once something becomes illegal,” Schuler said, “the illegal folks that want to masquerade in some fashion seem to come at this like, ‘Well, you have casino gaming, so why would you worry about my little strip-mall casino? You already have sports gaming, so why would you care about my little fantasy contest operation that’s offering head-to-head plays against the house?’”
“Well, we do because the law says we do, and we follow the letter of the law,” Schuler added.
Schuler said the OCCC’s general counsel Andromeda Morrison is “getting really good” at sending cease-and-desist letters to the fantasy sports operators attempting to offer illegal betting markets.
“The cease and desist have worked pretty well to date,” Schuler said. “But this is an ongoing thing.”
Five fantasy sports companies under investigation in Ohio
Jessica Franks, the OCCC’s director of communications, told Legal Sports Report that five fantasy sports websites are currently under investigation for offering illegal gambling in Ohio.
The five sites the OCCC is looking at are:
- Prediction Strike
- Dynasty Owner
- Lucra Sports
At least two of the sites have previously drawn negative attention for their product in other states.
Prediction Strike, which bills itself as “the first fantasy sports stock exchange where users can invest in their favorite athletes,” was hit with a cease-and-desist letter in January from the New Jersey Division of Gaming Enforcement. According to LSR, it is no longer available to use in New Jersey.
In its letter to Prediction Strike, the NJDGE said that since a player’s share price “depends upon the performance of individual athletes,” it was considered sports betting in the eyes of the Division.
Meanwhile, “social sportsbook” Fliff was recently the target of a $5 million class-action lawsuit filed with the U.S. District Court for the Central District of California, where sports betting is illegal. The complaint accuses Fliff of essentially operating as a sportsbook under the guise of free-to-play sweepstakes offerings.
According to LSR, Fliff stopped taking real-money deposits from users in Ohio as of June 1, in the wake of Ohio’s investigations.
All five targeted fantasy sports games unlicensed in Ohio
None of the five sites under investigation in Ohio are currently licensed as fantasy sports sites in the state. That could make it easier for the OCCC to handle the sites.
Last year, the commission revoked the fantasy sports license of StatHero for allowing players to play against the house (as opposed to against other players, a requirement in Ohio).
Because StatHero was licensed, the operator had the right to a hearing in front of the OCCC. Franks told LSR that because the five fantasy sports sites named as under investigation in Ohio are not licensed, the commission has varied options for dealing with them.
“Depending on the entities, if they are not licensed, we have a number of tools at our disposal to take care of illegal activity,” Franks said.