Sports betting companies licensed to operate in Ohio were warned that if they present their services as fantasy contests in order to pay lower licensing and compliance costs, they violate the state’s gambling law and may be penalized for that. Ohio authorities said the same goes for “fantasy” operators offering services that look a lot like sports betting. At a meeting held on Wednesday, the Ohio Casino Control Commission officials reiterated the legal definition of fantasy contests and said that only contests that meet all requirements would be classified as daily fantasy contests.
Why Some Sports Betting Operators Present Their Services as Fantasy Contests?
Ohio legalized daily fantasy sports in 2017, while sports betting was launched in January 2023. Although the state has a clear-cut statutory definition of daily contests, some licensed sports betting operators try to disguise their services, presenting them as fantasy contests, and there are several reasons for this.
First, “fantasy” operators pay lower license and compliance fees. While fantasy operators pay no more than $30k for a permit, sports betting companies have to part with $1 million if they want a license. Second, Ohioans can bet on fantasy contests when they turn 18, while the legal age to bet on sports is 21.
At a meeting held on Wednesday, Matt Schuler, executive director of the Ohio Casino Control Commission (OCCC), explained that regulatory problems are not unusual for the gambling market. He added that many fantasy operators offer prop bets, presenting them as fantasy contests. Schuler noted that OCCC General Counsel Andromeda Morrison sends cease-and-desist letters to operators falling afoul of the law.
What is the Legal Definition of Fantasy Contests in Ohio?
The Ohio Casino Control Commission is responsible for overseeing and regulating the daily fantasy contests market. Since January 1, 2023, the authority is also tasked with regulating all online sportsbooks. The regulator proved to be pretty strict, taking its responsibilities seriously.
According to Ohio’s law, fantasy contests are not gambling. Hence why, fantasy and sportsbook operators are subject to different oversight. The state’s law stipulates that fantasy contests should meet specific requirements to be considered as such. All fantasy contests should include an entry fee and a set prize. Additionally, players must use knowledge and skill to compete against each other.
On Wednesday, the deputy director of licensing told commissioners that the OCCC had issued 23 fantasy sports licenses to operators and renewed two permits since 2020. Schuler said that all contests must strictly follow the said criteria to be classified as fantasy contest games. He added that convincing the companies and their attorneys that they violate the law is a challenging task.