Regulators Are Becoming More Strict With Sports Betting Companies

January 23, 2023 World Crime & Legal

The advertising laws and responsible gaming practices are receiving increased attention from the regulators who oversee U.S. sports betting. The actions of the most recent states to join the list of states that allow sports betting provide proof that the industry has been moving in that way.

Regulators in the state of Ohio announced fines totaling more than $1 million for infractions committed by Barstool Sports, MGM, Caesars, and twice-bitten DraftKings. Significant advertising limits are included of Maine’s recently published draft regulations. Additionally, various initiatives to limit the advertising tactics of the sector have been made in Massachusetts as a result of regulatory hearings.

Operators’ Feet Are Held to the Fire by OH Regulators
The limitations on advertising are comparable to those in most other states. The difference lies in enforcement; in Ohio, six-figure fines are being issued, so it appears that there won’t be any handouts.

Due to a live show in November close to the University of Toledo, Barstool Ohio Sportsbook was the first to experience the wrath of the Casino Control Commission (OCCC). For two violations—advertising to those under 21 and advertising on or near college campuses—the OCCC will convene a hearing and ask for a fine of at least $250,000.

The OCCC claims that in November, DraftKings Ohio sportsbook violated another rule by sending 2,5000 mailers to Ohio residents under the age of 21.

For using “free” or “risk-free” bets in their promos, Caesars, MGM, and DraftKings were each fined $150,000.

In summary, the OCCC will have a zero-tolerance stance against RG infractions, and it is reasonable to predict that the fine will rise if a corporation commits additional violations. The fines levied by the OCCC are significantly higher than those levied in New Jersey or Pennsylvania, where penalties—aside from a $150,000 fine for a proxy betting scandal—typically fall in the low-five figure range. It’s still a long way from European standards, where seven- and eight-figure fines are now typical.

Maine follows Ontario’s lead
The draft standards for Maine were recently made public, and while the majority of the wording was lifted from other legislation, Maine imitated the strictest jurisdictions when it came to advertising.

The following are some of the highlights (keep in mind that these are draft regulations):

No physical medium may be used to promote or advertise sports betting in or on any colleges or universities in Maine.
Flyers, giveaways, and in-person account registration are not permitted.
When bets on an event are being accepted by a licensed operator in Maine, television advertising may only air during the event and only on the channel that is airing the event.
Promotions and/or bonuses may not be advertised on television.
The Director or his/her designee must have easy access to an electronic file that contains a record of all promotional or bonus wagering offers, which must only be made available on websites and mobile applications.
Can only be accessible through the Operator’s app or website.
Include terms and conditions that are exhaustive, accurate, precise, succinct, straightforward, and free from false information.
If the customer must suffer a loss or put their own money at risk in order to use or withdraw gains from the risk-free bet, it cannot be said to be risk-free.

Operators and other industry segments are anticipated to oppose some of these restrictions at a public hearing in Maine on January 31.

Regulators in MA take action that lawmakers would not
Lawmakers in Massachusetts spent a lot of time talking about advertising as they debated authorizing sports betting. In the end, many of the advertising prohibitions were lifted because lawmakers deferred to regulators with these choices.

During a meeting on January 12, the MA Gaming Commission made many of these judgments.

Along with the standard limitations, the MGC:

Imposed a requirement that 75% of the audience for sports betting commercials must be reasonably regarded as being 21 or older.
During licensing hearings, it sought operators to consent to a ban on marketing on college campuses.
Partnerships with Bay State universities or athletes under the age of 21 are prohibited.

the terms “free” and “risk-free” are forbidden in advertisements.

The state’s cannabis sector must abide by a 75% standard, which the MGC spent considerable time discussing boosting to 85%. When it was discovered that an 85% requirement would probably forbid commercials at athletic events, the MGC settled on 75%. Once the market opens, Massachusetts sportsbooks will need to abide by tight rules.

Upshot
More stringent regulations for sports betting providers are becoming the norm in the U.S., especially in the areas of responsible gaming and advertising.

In a GeoComply-hosted webinar in September 2021, Director of the New Jersey Division of Gaming Enforcement David Rebuck warned that if the industry doesn’t self-regulate, authorities will have no choice but to become involved.