DraftKings, PENN Agree To Pay Hefty Fines Tied To Promoting Ohio Launch

Improper marketing of DraftKings and Barstool sportsbooks leads to combined $750,000 in fines
online sports betting

DraftKings and PENN Entertainment agreed to pay a combined $750,000 in fines to the Ohio Casino Control Commission Wednesday to settle violations related to marketing of their online sportsbooks.

DraftKings will pay $500,000 under a settlement agreement covering two different violations and PENN will pay $250,000 as a penalty from improper marketing of the Barstool Sportsbook in its interactive division.

Representatives of the companies told the commission at its monthly meeting Wednesday morning that they took responsibility for errors they said will not be repeated.

The operators were accused of actions that ran counter to the state’s focus on responsible gambling messaging — including its heavy intent to prevent underage gambling — related to Ohio’s launch of legalized sports betting on Jan. 1.

At last month’s commission meeting, Caesars agreed to pay a $150,000 fine for the same type of violation in promoting its sportsbook. A fourth operator, BetMGM, was also issued notice of a $150,000 penalty last month. A casino commission spokeswoman said BetMGM has waived its right to a hearing and final action on its violation will be taken at a future meeting.

Operations call their actions ‘regrettable’

The biggest fine of $350,000 pertained to DraftKings having sent advertisements promoting the new sportsbook to some 2,500 individuals under the age of 21.

The major operator received a second fine of $150,000, along with the same penalty for Caesars and BetMGM on Jan. 5, when the commission announced the three of them had falsely been advertising offers to customers as “risk-free” and had insufficiently promoted messages and help related to potential problem gambling.

DraftKings representatives told the commission Wednesday that “certain missteps occurred during rollout” that are “regrettable” and new procedures and staff training are in place to avoid repeating them.

“We take these issues very seriously,” said Chief Marketing Officer Stephanie Sherman, avowing the launch-related problems “are not representative of our first-rate team, products, and culture.”

The PENN/Barstool fine of $250,000 stemmed from a fall event by the Barstool Sports college football show on the University of Toledo’s campus at which a pre-registration promotion was touted for the sportsbook’s upcoming launch. Numerous individuals under legal betting age of 21 would have been attendees at the event.

Chris Soriano, PENN Entertainment’s chief compliance officer, said the company has historically been proud of its commitment to responsible gambling.

“In this matter, we fell short of the mark — we accept responsibility for that,” he said. “We regret this took place.”

State has been unusually tough

The Ohio Casino Control Commission has stood out among state regulators for taking swift enforcement action against operators for promotional activity deemed improper at the dawn of legalized betting. The level of the fines is such that they can be considered more than mere slaps on the wrist.

“We take very seriously what has occurred, and we appreciate the authenticity you are both articulating,” commission Chairwoman June E. Taylor told the operators. “We are committed to our citizens and the transparency that is needed for sports betting to occur safely, and for our citizens to understand what can occur on the other side of things at times.”

She also alluded to both the heavy advertising the sportsbooks have done in the state — making special note of ubiquitous Kevin Hart commercials for DraftKings — and how Gov. Mike DeWine has expressed his own concerns about the industry’s start. DeWine has both questioned the sportsbooks’ promotional activities and called in his new budget proposal for their tax rate to be increased from 10% to 20%.

Photo: Shutterstock


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