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Ohio has been one of the most aggressive states in regulating sports betting bonus advertising. Before sports betting went live in the state on Jan. 1, the Ohio Casino Control Commission included an FAQ section for sportsbook marketers. In those FAQs, it explicitly prohibited the use of the phrases “free” or “risk-free” for bets that require bettors to risk their own money before receiving site credits.
Within the first week of legal betting, Ohio regulators levied $150,000 fines against Caesars, BetMGM, and DraftKings for including usages of “free” or “risk-free” in their marketing. DraftKings faces an additional $350,000 fine for sending about 2,500 direct mail ads to Ohioans under 21.
Ohio’s crackdown has important implications for the largest sports event of the year. DraftKings and FanDuel plan to run Super Bowl ads promoting their sportsbooks. While these ads will air nationally, the OCCC can fine companies if either ad violates Ohio state law.
“There is no exception in Ohio law for advertisements that are national or multi-jurisdictional,” OCCC spokesperson Jessica Franks said in an email to Gaming Today. “All advertisements that are available in Ohio must adhere to all requirements of Ohio law, including the advertising standards in Ohio Adm.Code 3775-16-08 and the promotion requirements in Ohio Adm.Code 3775-16-09.”
Ohio regulators have made it clear they’ll be paying attention to what will be some of the most-watched commercials during the year. But the OCCC’s early crackdowns have already transformed bonus advertising nationwide.
Sportsbook Marketing Language Changes After Ohio Comes Down on Operators
Ohio’s stringent ad regulations have forced sportsbook operators to change the marketing language Ohio bettors see in this newly legal market.
For example, FanDuel changed its welcome bonus language from “risk-free bet” to “bonus bets.” Before Ohio sports betting went live, FanDuel often offered a $1,000 risk-free bet, which required bettors to place a wager before getting site credits back. In a commercial promoting its Ohio offer, FanDuel uses “bonus bets” rather than “risk-free.”
“FanDuel led the industry by removing the term ‘Risk-Free Bets’ from our marketing,” a FanDuel spokesperson claimed in an email. “We are now moving towards the term ‘Bonus Bets,’ which complies with Ohio regulations and will be seen in all marketing moving forward. FanDuel follows the regulations for each state in our advertisements.”
BetMGM also changed its ad language. A Nov. 20 commercial featuring Jamie Foxx advertises a $1,000 risk-free bet. A Jan. 1 commercial advertised first-bet insurance paid back in free bets.
DraftKings also changed its advertising. Its pre-launch commercial in Ohio advertised $200 in free bets. Its current Ohio ad language is “bonus bets.”
Caesars Sportsbook has gone from “risk-free be” to “first bet” or to a bet that is “on Caesars”.
What’s remarkable about this change isn’t that it has happened. It’s that it took the 33rd state to launch legal sports betting — Ohio — to awaken the industry to misleading messaging promoting “free” bets.
When ‘Free’ Isn’t Quite Free
Ohio hasn’t eliminated “free” language entirely. It has targeted only “free” language that requires bettors to risk their own money first. Since site credits typically expire after seven days, can be used only to bet, and can’t be withdrawn, the use of the word “free” to describe these bets is indefensible, according to Ohio regulators.
Even if sportsbook companies contested an Ohio fine for “risk-free” language, Ohio regulators have the high ground.
“The burden will be on Ohio to show that [risk-free language] is the kind of thing that could fool a substantial number of reasonable consumers,” Professor of Law at Harvard, Rebecca Tushnet, said. “Not everyone, not even the majority, but more than just someone that wasn’t paying attention.”
Free speech clauses won’t help much, either. US free speech law is “very far on the side of negative rights,” as Professor Tushnet puts it. That means laws restrain others from infringing on other people’s rights, instead of granting people entitlements to rights or behaviors. Since the federal government hasn’t made federal sports betting ad rules, sportsbooks are as free to advertise as states allow.
“So basically, it’s entirely dependent — or almost entirely dependent — on whether the regulator has bit the bullet and said, ‘no, you can’t do this,’” Tushnet said.
That reality makes regulators in new industries even more important. Our system of recognizing negative rights, non-interference in recognized rights, is that consumers have two choices: Organize themselves into a class action lawsuit demanding protection, or rely on regulators to enforce protections for consumers.
Massachusetts One To Watch
For the 2023 Super Bowl, 30-second commercials cost between $6-7 million. The country’s two largest sportsbooks will spend record-breaking commercial prices to advertise their companies and accompanying bonuses to millions of potential new consumers.
Since Super Bowl commercials are broadcast nationally, DraftKings and FanDuel must comply with every state’s sports betting marketing rules. Since Ohio regulators are the most willing to crack down on the industry’s questionable marketing practices, its regulators are the ones to watch after the Super Bowl ads air.
If DraftKings or FanDuel airs a Super Bowl commercial that promotes the “free” language that’s prohibited in Ohio, they are likely to face fines from the state’s regulators. That kind of action on a national campaign could be the kind of event that invites the attention of other state gaming commissions or attorneys general.
Massachusetts is coming online as a legal sports betting state, and its regulators enjoy a good reputation. The industry may see more crackdowns that not only address marketing language, but also the holes in direct marketing, self-exclusion, and other highly visible issues.
The way that DraftKings and FanDuel design their Super Bowl ads, and the way that Ohio’s regulators respond to it, will have consequences that reverberate across the gambling industry. Whether Ohio regulators inspire regulatory action from other states or the federal government, the ultimate beneficiaries of responsible marketing rules are consumers.
