DraftKings’ Super Bowl ad featured a free bet offer that complied with Ohio sportsbook marketing regulations. Per the ad, any DraftKings user could opt-in to receive $5 in bonus credit during the Super Bowl. This was available both to long-time customers and to new users who’d created a free account just for the Super Bowl.
The use of the terminology “free” in DraftKings’ Super Bowl ad was the common sense use of the word. However, that has not been the way that “free” has been used in the first four years of legal American sports betting.
Traditionally, risk-free bets have referred to bonuses that acted more like insurance. Bettors would place a wager with their own money, then receive site credits equal to the amounts they lost up to the advertised amount.
State regulators routinely prohibited “misleading” advertising, but hadn’t cracked down on “free” and “risk-free” terminology when the offer required risk and cost money.
Then, regulators in Ohio, which on Jan. 1 of this year became the 33rd state to launch legal sports betting, began handing out large fines to three sportsbooks (DraftKings, Caesars, BetMGM) that marketed “free” bets, violating the state’s terms.
Ohio Regulations and DraftKings Super Bowl Ad
Ohio regulations prohibit the use of “free” or “risk-free” in bonus offers that require bettors to bet their own money before receiving bonus credits. If an offer is legitimately free, then it can be advertised as free.
Shortly after Ohio sports betting launched, Ohio regulators issued $150,000 fines to DraftKings, BetMGM, and Caesars for offering “free bets” that required customer investment. Ohio became the first state to effectively prohibit the common usage of “free” and “risk-free.”
The offer in the DraftKings Super Bowl ad was legitimately free, because bettors didn’t need to pay to get the bonus. So, the spot, featuring Kevin Hart and several former athletes and other celebrities, complied with Ohio advertising law.
Since the Super Bowl ad aired nationally, it had to adhere to every state advertising requirement. That included Ohio, the strictest jurisdiction about sportsbook marketing language so far.
Ohio’s easily replicable advertising crackdown rippled not only to change bonus offer language on individual apps, it even spread to one of the most expensive TV advertisements that money can buy.
Other State Regulators and Enforcement Issues
Ohio launched its sports betting industry about five years into sports betting’s legalization wave. It has had time to observe the strengths and weaknesses of other state regulations. In that light, it’s unsurprising that it seized on a long-standing area of concern for the industry.
Ohio also shows the impact that a single state can have on a growing industry. There’s a chance at lasting impact in the sports betting industry for any state regulator that can either:
- Address an issue locally that sportsbooks are forced to address nationally
- Solve a problem whose solution other states can easily replicate
Ohio’s fines for misleading “free” and “risk-free” language fall under the first category. It not only affected the use of “free” in national advertisements. It also spurred a change in bonus language in other states that didn’t explicitly require that change. The regulatory language still exists in other states to issue fines or suspend licenses for advertising language that has been recognized as misleading.
An easily replicable solution might be a centralized and airtight self-exclusion list. Each state regulator could maintain the state’s self-exclusion list, which could include names and addresses to not only keep from accessing sportsbooks, but also from receiving direct marketing ads. This would take the burden off sportsbooks to keep different state lists and could improve the barrier between direct marketing ads and self-excluded bettors.
The DraftKings Super Bowl ad is part of a larger case study of how one state regulator can impact a burgeoning industry, even outside that regulator’s jurisdiction. Current and future sports betting regulators should pay attention, as sportsbooks’ major customer acquisition season continues through March Madness.