Sports betting sites trying to pass their products off as fantasy contests will get no love from the Buckeye State.
With Ohio sports betting now well underway, regulators there have taken a tough tone with operators that run afoul of the rules, particularly those for advertising. However, Buckeye State watchdogs are applying that same approach to “fantasy” operators offering products that look a lot like sports betting.
Matt Schuler, executive director of the Ohio Casino Control Commission (OCCC), said during a meeting on Wednesday that there are always challenges with regulating gaming. With fantasy, Schuler noted, some operators are essentially offering prop betting markets and trying to call them fantasy contests.
“There's an army of these out there,” Schuler said. “And the staff, as a regular course of action, is scanning out there to see who's doing business in the state of Ohio.”
'We follow the letter of the law'
Schuler added OCCC General Counsel Andromeda Morrison is “getting really good” at sending out cease-and-desist letters to offending operators, which is effective. Yet the fight against sports-betting-framed-as-fantasy-contests is an ongoing thing, the director said.
“Once something becomes illegal, the illegal folks that want to masquerade in some fashion seem to come at this like, ‘Well, you have casino gaming, so why would you worry about my little strip-mall casino? You already have sports gaming, so why would you care about my little fantasy contest operation that’s offering head-to-head plays against the house?’” Schuler told commissioners. “Well, we do because the law says we do, and we follow the letter of the law.”
Ohio launched legal sports betting on January 1, kicking off a new era of gambling in the Buckeye State. Since then, more than a dozen online sportsbooks have legally taken bets in Ohio. They have also done so under the watchful eye of the Ohio Casino Control Commission, which has quickly proven itself to be one of the tougher sportsbook regulators in the U.S.
Before the launch of sports betting, the OCCC was regulating fantasy contests in Ohio, and the state has a statutory definition of what is and is not a fantasy contest. Those contests are not gambling under Ohio law and are subject to different oversight than sportsbooks.
For a fantasy contest to be considered as such in Ohio, certain criteria must be met, the OCCC heard on Wednesday. That includes an entry fee, that the prize is set and players notified about its value in advance, and that players must use their knowledge and skill to compete against other players in setting rosters (the house is not considered a player). OCCC staff reviews the contests fantasy operators are offering to ensure they comply with state law.
Dear Mr. 'Fantasy'
There are reasons why a “fantasy” operator that offers sports betting would want to be seen as a fantasy company.
Licensing fees for fantasy in Ohio are lower than those for sports betting ($30,000 at most for fantasy operators, but north of $1 million for sportsbook licensees) and compliance costs are also lower. Furthermore, there is no fantasy contest tax in the state, and the legal age for players is 18, instead of 21 for casino gaming and sports betting.
The OCCC has issued 23 fantasy licenses since February 2020 and renewed two permits, Aleah Page, deputy director of licensing, told commissioners. For example, operators such as DraftKings, FanDuel, and Underdog have Ohio fantasy licenses, as well as sports-betting permits.
But Schuler told the commissioners he sees a "bright line" between what is a fantasy contest and what is not. And, he added, if a contest meets the statutory definition, it will be “an exact traditional fantasy contest game,” wherein players set rosters and pay their entry fee, among other things.
“Once they start to vary off of that path, they usually, I mean, almost automatically, run afoul of the law,” Schuler said. “And the time-consuming part is convincing them and their attorneys that that's the case.”
