DraftKings Faces $350K Fine in Ohio After Sports Betting Promo Mailed to People Under 21 (UPDATED)

Posted on: December 30, 2022, 03:31h. 

Last updated on: December 30, 2022, 08:40h.

Steve Bittenbender Read More
Expertise: Legislation, Sports Betting, Horse Racing.

The Ohio Casino Control Commission (OCCC) announced Friday afternoon it intends to fine DraftKings $350,000. That’s after the sports betting giant allegedly sent promotional materials to individuals under 21 years of age.

California Sports Betting
Jason Robins of DraftKings speaks during a keynote session at the 2022 Global Gaming Expo in Las Vegas, with FanDuel’s Amy Howe (center) and CNBC’s Contessa Brewer listening. On Friday, the Ohio Casino Control Commission said it intends to fine DraftKings $350,000 after it sent sports betting promotional mailers to roughly 2,500 people under the age of 21. (Image: Casino.org)

The fine against the online gaming company comes two weeks after the commission said it would fine Penn Sports Interactive $250,000.  That’s after Barstool Sports promoted its online sportsbook at a college football show held at the University of Toledo.

Legal sports betting is set to start in Ohio on Sunday.

An OCCC spokesperson told Casino.org at the commission’s Dec.14 meeting — when the Barstool fine was announced — that it was believed to be one of the largest financial penalties the regulatory body has sought.

According to the commission, DraftKings in November sent about 2,500 mailers that were “directly addressed” to individuals not old enough to register for sports betting accounts in the state.

Underage Gambling a Point of Concern

Gaming regulators in the state have put increased emphasis on ensuring sports betting operators adhere to standards for responsible gambling in their marketing materials. They are also making sure they do not target anyone under 21.

“The commission has been very clear about the rules and standards for sports gaming advertising with the industry, and are disappointed with the lack of compliance we have seen despite reminders,” said OCCC Executive Director Matt Schuler in a statement. “While we do not take administrative action lightly, DraftKings’ conduct in this case warrants the commission’s intervention to ensure the integrity of sports gaming.”

Besides the fine, the OCCC is mandating DraftKings establish protocols to prevent mailers being sent to people whose ages have not been verified.

DraftKings can request a hearing into the matter. Should a hearing take place, an appeals judge would hear the case and file a report with the commission. The commissioners would then review that report and take action.

All fines levied by the commission go to the state’s Sports Gaming Revenue Fund.

A message to the Boston-based company was not immediately returned on Friday afternoon.

Times Articles Didn’t Spur Ohio Action

The sports betting industry, in general, has been under greater scrutiny since a series of articles published by The New York Times last month exposed some of the practices the companies and their lobbyists used to get states to legalize the gaming product.

One of the articles in the series talked about marketing agreements operators like Caesars and PointsBet has with colleges and the concerns stemming from those deals. The series also focused on regulators being unprepared to deal with sports betting as it expanded rapidly across the country.

After Schuler announced the Barstool fine and actions at the meeting earlier this month in Columbus, he told Casino.org that the OCCC’s actions were not a response to The Times series.

We already had our rules in place on this subject,” he said. “They actually called and asked us questions about this, but we had talked about college campuses and about our advertising rules. Honestly, it didn’t fit into the narrative of the story. So, they didn’t put in our good stuff, but that’s where we were.

“During the rule process in the spring is when these regs came forward from our staff. So (The Times articles) didn’t amplify it, didn’t initiate it. We were already committed to it long before any of those articles came out, and part of it is because we saw the need for such regulations.”

DraftKings Fined Previously Elsewhere

If the Ohio fine is upheld, it would not be the first for DraftKings.

In March, the New Jersey Division of Gaming Enforcement (NJDGE) levied a $150,000 financial penalty against the sports betting operator after it let a Florida man bet on its app in the Garden State through the use of a proxy, which is not allowed in the state.

In late June, the Alcohol and Gaming Commission of Ontario (AGCO) fined DraftKings CAD$100,000 (US$73,795) for promoting a 2-1 odds boost in its commercials and social media posts. Gaming regulations in the Canadian province only allow operators to offer bonuses on its website or through direct promotional materials if the bettor has agreed to receive them.