Regulators Get Tough On Sports Betting Operators

Regulators overseeing US sports betting are becoming more focused on responsible gambling and advertising policies. The industry has been trending in that direction, evidenced by the actions of the most recent additions to the list of legal sports betting states.

In the Buckeye state, regulators announced more than $1 million in fines for violations by Barstool Sports, MGM, Caesars, and twice-bitten DraftKings. Maine’s recently unveiled draft rules include significant advertising restrictions. And in Massachusetts, regulatory hearings have resulted in several efforts to rein in the industry’s advertising practices. 

OH Regulators Hold Operator’s Feet to the Fire

Advertising restrictions are similar to what you find in most other states. The difference is in enforcement, and there will apparently not be any slaps on the wrist in Ohio, as the state is handing out six-figure fines.

Barstool Ohio Sportsbook was the first to feel the Casino Control Commission’s (OCCC) wrath stemming from a November live show near the University of Toledo. The OCCC will hold a hearing where it will request a fine of at least $250,000 for two violations, advertising to under-21s and advertising on or near a college campus. 

DraftKings Ohio sportsbook also had a violation in November, where the OCCC alleges DraftKings sent 2,5000 mailers to Ohioans under the age of 21. 

Caesars, MGM, and DraftKings were each hit with a $150,000 fine for using “free” or “risk-free” bets in their promotions. 

The bottom line, the OCCC will have a zero-tolerance policy towards RG violations made by Ohio sportsbooks, and it’s safe to assume the amount will increase if a company has subsequent violations. The fine amounts handed out by the OCCC are very different from fines in New Jersey or Pennsylvania, where apart from a $150,000 fine for a proxy betting scandal, punishments tend to land in the low-five figures. However, it’s still a far cry from European levels, where seven- and eight-figure penalties have become common.

Maine Takes the Ontario Approach

Maine’s draft regulations were recently revealed, and while it’s mostly borrowed language from other jurisdictions, Maine mimicked the strictest locales when it comes to advertisements. 

Here are some of the highlights (it’s important to remember these are draft regulations): 

• Sports wagering shall not be promoted or advertised in or on any Maine colleges or universities through the use of physical media.
• Flyers, handouts or in person account signups are prohibited.
• Television advertising may only take place during an event and only on the channel that the event is being telecast when wagers on that event are offered by a licensed operator in Maine.
• Television advertising shall not advertise promotions and/or bonuses.
• A record of all promotional or bonus wagering offers shall be limited to websites and apps and maintained in an electronic file that is readily available to the Director or his/her designee.
  • Only be offered in the app or on the website of the Operator.
  • Include terms and conditions that are full, accurate, clear, concise, transparent and do not contain misleading information.
  • Not be described as risk free if the patron needs to incur any loss or risk the patron's own money to use or withdraw winnings from the risk-free bet.

Maine has a public hearing scheduled for Jan. 31, where it’s expected operators and other sectors of the industry will push back on some of these restrictions. 

MA Regulators Do What Lawmakers Wouldn’t

As MA lawmakers discussed legalizing sports betting, they spent a lot of time on advertising. At the end of the day, many of the advertisement restrictions were stripped as lawmakers punted those decisions to regulators. 

The MA Gaming Commission made many of those decisions during a meeting on Jan. 12. 

In addition to the boilerplate restrictions, the MGC:

• Imposed a threshold for sports betting advertisements requiring 75% of the audience to reasonably be considered 21 or older.
• Prohibited advertisements on college campuses – something it asked operators to agree to during licensing hearings.
• Prohibited partnerships with Bay State colleges or athletes under the age of 21.
• Banned using “free” and “risk-free” in promotions.

The MGC spent a lot of time considering raising the 75% threshold to 85%, which is what the state’s cannabis industry must adhere to. The MGC landed on 75% when it was revealed that an 85% threshold would likely bar advertisements at sporting events. Massachusetts sportsbooks will have to adhere to strict regulations once the market goes live.

Upshot

The trend across the U.S. is stricter rules on sports betting operators, particularly in the area of responsible gambling and advertisements. As seen in recent state launches, operators had to carefully advertise their brands. The same applies to upcoming MA launch, where brands will carefully have to promote their Massachusetts sportsbooks promos.

As New Jersey Division of Gaming Enforcement Director David Rebuck said in a September 2021 webinar hosted by GeoComply, the industry needs to self-regulate, or regulators will be forced to step in.

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