The Ohio Casino Control Commission has proposed a new rule forbidding sportsbooks from offering sports betting promotional offers in connection with unrelated, non-gaming consumer transactions.
The new rule proposal comes a month and a half after Fanatics Sportsbook pulled a promotion in Ohio whereby customers purchasing items from Fanatics’ vast merchandise catalog online were given a “Bonus Bet” matching the price of their purchase to use on the sportsbook app.
The move to ban promotions like Fanatics’ matching “Bonus Bet” offer is just the latest response from the OCCC cracking down on sportsbooks’ marketing and promotional efforts that run afoul of its guidelines.
Along with issuing warnings and reminders, since Ohio online sportsbooks launched on Jan. 1, the Commission has levied $1.29 million in fines against sportsbook companies, much of which has been for violations of the state’s rules regarding promotions, advertising and marketing.
Fanatics promo ended quietly, but questions remained
The Fanatics Sporstbook dustup centered around a May promotion shoppers came across in the Fanatics online store when checking out to pay for merchandise. The store was offering a bet credit in the amount of merchandise for those who purchased and then signed up for the sportsbook.
The OCCC never said what was wrong with the promotion, telling PlayOhio at the time: “Fanatics has ceased the promotion in question — the Commission appreciates Fanatics’ attention in this matter.”
Fanatics quickly pulled the promo and did not use it during its Massachusetts launch a few weeks later.
One issue could have been related to advertising to people younger than 21. It is unclear if the Fanatics retail site could differentiate between shoppers who are of legal age to gamble in Ohio.
It appears that Ohio took issue with another angle: advertising sports betting via “unrelated transactions.” That’s where the OCCC’s latest rule update focuses.
Promos for unrelated transactions “normalize” gambling
In a June 28 letter to sports gaming stakeholders, the OCCC announced the new rule proposal, as well as an update to the Commission’s FAQs section on its website.
“These FAQ changes have been made because the Commission has become aware of sports gaming promotions based on unrelated consumer transactions,” the letter said.
“These promotions are targeted to specific consumers based upon their consumer purchase with an affiliate company. These types of promotions target these consumers with a sports gaming promotion inducement specifically because of their unrelated consumer transaction. These types of promotions include offers made to a consumer following the consumer transaction on the affiliate marketer’s website or application or made following the consumer transaction to the consumer’s email address, by mail, or other direct communication.”
The Commission said the unrelated consumer promotions go against the state’s responsible gambling tenets. Such promotions, the letter said, “would contribute to the normalization of gambling — providing gambling rewards from simply engaging in non-gaming consumer spending activity.” The letter said research shows that “normalization of gambling increases the risk for problem gambling, especially among young people.”
The OCCC requested each sportsbook operating in the state confirm it doesn’t — or has stopped — offering such promotions by July 7. Though the Commission immediately declared the promos “impermissible,” it is allowing stakeholder comments on an official rule change to the Ohio Administrative Code until July 12.
Ohio leads move away from “free bet” language in promotions
Ohio’s quick and decisive response to sportsbook violations, as well as its proactive measures in legislation designed to protect consumers and promote responsible gambling, are often cited in reporting on sports betting regulation across the country, as more states legalize sports gaming.
Included in Ohio’s sports betting law from the start was a ban on the use of terms like “free bets” and “risk-free bets” in promotional offers that required the customer to “incur any loss or risk their own money to be used or to withdraw winnings.”
Some of the OCCC’s first sports betting-related fines — including ones against Caesars Ohio and DraftKings Sportsbook — were due to promotions that were advertised as “free” or “risk-free.”
Sportsbook operators quickly adapted language around promotions to more accurate phrases like “bonus bets” or “bet credits.”
Since then, the sports gaming industry seems to have moved closer to a consensus that “free bet” terminology is misleading and should be prohibited.
In March, the Pennsylvania Gaming Control Board announced such language in promotions was no longer allowed. And in Massachusetts (which launched sports betting March 10), sportsbooks are also not allowed to advertise bets as being free of risk.
In late March, the American Gaming Association, a gambling industry collective that includes several leading sportsbook operators, updated its Responsible Marketing Code to include a provision prohibiting the use of the phrase “risk-free” in promos and advertising. Another industry trade association, iDevelopment and Economic Association (iDEA), followed suit in May, updating its responsible advertising guidelines to say that “advertisements should not use ‘risk-free’ language.”
Sportsbooks moving away from college marketing
Just before Ohio’s sports betting launch, the OCCC sent a letter to stakeholders reminding them that the state requires all advertising and marketing to contain “conspicuous” responsible gambling messaging.
The late-December letter also asked that all operators “look at the platforms and areas they are advertising and ensure they are not targeted at individuals under 21.”
That includes targeting college-age students. Ohio regulations forbid sportsbooks from promoting on college campuses or “targeting the area of a college or university campus.” At the time, not many other states had such college-focused restrictions.
In late 2022, PENN Entertainment, which owns and operates Barstool Sportsbook, was served a notice of violation over the reading of an advertisement during the broadcast of its Barstool College Football Show from near the campus of the University of Toledo. PENN accepted the OCCC’s $250,000 fine in February.
Partnerships with and advertising at universities have increasingly become frowned upon. There has generally been movement this year away from advertising at colleges in the sports gaming industry. The AGA and iDEA included restrictions on university partnerships and marketing in their updated advertising codes
While some states have rules regarding promoting sports betting at colleges, in recent months, several sportsbook operators have voluntarily ended marketing partnerships with universities. According to Legal Sports Report, the only remaining sportsbook/college partnership in the U.S. is between SuperBook and the University of Denver.
Unlike Ohio, Massachusetts regulators face industry pushback
Operators have so far been responsive and amenable to the OCCC’s reminders and warnings and accepting of fines, at least publicly. Representatives from fined sportsbooks have appeared at OCCC meetings to apologize and accept the fines.
That seemingly friendly relationship between regulators and operators isn’t always the case in other states, where sportsbook companies have pushed back against certain regulatory actions.
The Massachusetts Gaming Commission, which, like the Ohio Casino Control Commission, has been noted for its stringent vigilance in regulating sports betting, last month held a hearing to determine if PENN Entertainment should face punishment over Barstool Sportsbook’s “Can’t Lose Parlay” promotion.
Although Barstool pulled the promotion in March and no longer offers it in any markets, rather than accept punishment, a PENN representative appeared at a June adjudicatory hearing to fight against disciplinary action, arguing that the “Can’t Lose Parlay” was obviously satirical and therefore not misleading because the Barstool personality associated with the promo was known to be an unsuccessful bettor. The MGC has yet to announce what, if any, punitive action it will take.
Several sportsbooks and three Boston pro sports franchises were also vocally opposed to Massachusetts regulators’ intent to force operators to include the phrase “21 and over” on all advertising, logos and other branding.
The Gaming Commission ruled in late June that while not every appearance of a sportsbook brand’s logo needed to have the age restriction, the “21 and over” notice must appear on stand-alone logos at sports venues like Fenway Park and Gillette Stadium, since it would be seen by people under 21.
Ohio regulators have not won every battle
The OCCC has seemingly worked well and found common ground with sports betting companies operating in Ohio. But it hasn’t won every battle.
For example, the Commission is not thrilled that Columbus’ MLS team allows sportsbook branding on its uniforms. The logo of Columbus Crew’s sportsbook partner, Tipico Sportsbook, is emblazoned on the players’ jersey sleeves.
During an October 2022 webinar for Ohio problem gambling prevention and treatment professionals hosted by the Problem Gambling Network of Ohio, the OCCC’s deputy general counsel William Cox lamented the industry pushback when it tried to adopt a rule that would have forbid sportsbook ads on player jerseys in the state.
Cox said the pushback included threats of legal action, which he said was the only time that ever occurred in the rules setting process.
“A lot of people who buy jerseys are under the age of 21,” Cox says. “Why do they buy jerseys? For their hero worship, right? Because they look up to LeBron James, they look up to Joe Burrow. So we tried to adopt a restriction on that, the industry pushed back really hard.”
As a compromise, Cox said, the Commission was able prohibit the sportsbook logos being placed on youth-sized jerseys.
Ohio regulators still didn’t exactly go quietly on the uniform issue. In a May article in The New York Times about sportsbook advertising regulations nationwide, OCCC executive director Matt Schuler called the Columbus Crew placing Tipico branding on its jerseys “entirely offensive.”
“Their greed trumps the common sense that they should be employing when looking out for the harm to minors,” Schuler said.
