Crain’s editorial: No such thing as ‘free’ in sports betting – Crain’s Cleveland Business

Ohio took a chance on sports betting, and for the most part, people seem to like it.

Whether the industry is taking its responsibilities seriously enough, though, is an open question. Ohio and other states are, appropriately, cracking down on some bad practices, particularly around advertising. Companies in the sports gambling business, meanwhile, need to re-examine their operations to make sure they're meeting the letter and spirit of the law, because the easiest way to tank the industry in a new market is to give the impression that rules don't apply.

There has been some skirting the rules to date.

The Ohio Casino Control Commission has imposed more than $800,000 in fines on sports betting companies since January, according to an article in The New York Times that looked at how states nationwide are stepping up regulation of the fast-growing industry to minimize harm to the public that can spill over to athletes. Much of the concern relates to advertising that may reach underage bettors. One of the Ohio violators was the betting platform DraftKings, which, the Times noted, "acknowledged it illegally claimed bettors could make 'free' bets and mistakenly mailed out 2,582 advertisements to state residents under the legal betting age of 21, urging them to download its mobile app and claim $200 in free bets." Its total fines so far this year: $500,000. BetMGM and Caesars Sportsbook have been levied fines of $150,000 each.

Closing in on a million dollars in fines after only four full months of legal gambling in Ohio shows the state is being aggressive in policing the business. The state also has enacted some smart, reasonable rules related to sports betting, particularly in the area of defining involuntary exclusion from casino and sports gambling facilities.

This is, though, a bit of a game of Whac-a-Mole without stronger industry buy-in.

Matt Schuler, executive director of the Ohio Casino Control Commission, told the Times that he was disappointed in the content of sports gambling advertising in the state, saying, "Folks are waking up to the need to intervene and not wait a decade and have the full brunt of harmful effects of this, particularly on minors. The industry will certainly never police itself." (He did note, though, that enforcement had resulted in more compliance from advertisers.)

It has been a busy time for Schuler, who in early May barred licensed sportsbooks in the state from accepting bets on University of Alabama baseball games hey, sports bettors will wager on just about anything after a report warned of suspicious gambling activity.

The point is, there's a slippery slope to all this, to potentially disturbing places of bettors threatening or harassing athletes, and athletes giving into financial temptations that can lead to compromising the integrity of their games.

There's not necessarily a straight line between advertising-related sports gambling violations and on-field/on-court problems, but any whiff of illegality can't be tolerated. Ohio was relatively late to the game, but sports betting now is legal in 33 states. BIA Advisory Services, a media-industry research firm, estimates $1.8 billion was spent advertising online gambling last year in local U.S. markets, and that number is climbing fast as big states, including Ohio, enter the market.

There are some promising signs on the industry front. The American Gaming Association trade group, for instance, has revised its "responsible marketing code" to ban members from using the "risk-free" language, and the NBA recently prohibited the league's advertising partners from using it during broadcasts.

In Ohio, we have only three full months of data on sports gambling, but it has been popular with the public.

The state casino control commission reported Ohioans placed nearly $740 million in sports bets in March, up about 15% from just under $640 million in February, though down considerably from $1.1 billion in January, when business was driven by novelty, lots of advertising and promotion, and "come bet with us" deals. March is a big month for sports betting because of the NCAA basketball tournament, and we should expect to see some ups and down as the year goes on.

The best way to keep the numbers up to make sure sports gambling is on the up and up. The industry only grows if it grows responsibly.

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Crain's editorial: No such thing as 'free' in sports betting - Crain's Cleveland Business