Ohio Slaps DraftKings With $425,000 Penalty for Regulatory Violations

The Ohio Casino Control Commission (OCCC) announced a settlement agreement with DraftKings for college player prop and account funding violations earlier this week.

OCCC Crowns Kings

Beginning on March 1, 2024, college player props were outlawed in the Buckeye State, a subject that has been at the forefront of the NCAA and many legislators who believe the practice leads to harassment of college athletes. Several other states have also followed suit, but there is strident opposition in Ohio to the prohibition, and debate has ensued about undoing the ban and allowing college player props back on Ohio’s sportsbooks’ betting menus.

Yet, as of this writing, the wagering option is still off limits, and it was discovered that Boston-based DraftKings accepted an undisclosed number of college player prop bets between March 14th and March 19th, 2024, in direct violation of the revised statute.

“The Commission communicated with the regulated community, including providing an opportunity for comment prior to deciding whether to prohibit NCAA player proposition wagers in Ohio,” says the notice of violation that was sent to DraftKings in June. “DraftKings participated in the comment period and was provided notification of the wagering catalog change in advance of the March 1, 2024 implementation date.”

Online Cash Accounts

It was also revealed that the popular sports betting site permitted cash-funded accounts at “non-gaming retail locations” without the commission’s approval. After an investigation, it was discovered that between January 1st, 2023, and March 5th, 2024, the Boston-based bookmaker accepted 40,985 deposits fitting that category for a total amount of $2,545,927.76.

Casino Control Commission Chair Thomas Stickrath said in a press release, “The Commission is steadfast in its efforts to ensure Ohio’s sportsbooks are in compliance with all gaming‐related laws, and we will not hesitate to take administrative action, when necessary, in order to maintain the integrity of gaming and to protect Ohio’s citizens.”

According to Ohio’s sports betting regulations, cash can be used to fund accounts in the Buckeye State but only at “an approved cashiering or kiosk location.”

Fixing the Problem

In addition to paying the $425,000 penalty, DraftKings worked with regulators to determine why the issue occurred and implemented procedures that would prohibit those infractions from happening again. DraftKings has subsequently disabled the software corresponding to college player props and refunded all “non-winning bets” on college player propositions to its customers. It has also shut down the unauthorized cash deposit method, which led to the regulatory breach.

Wednesday’s press release further added, “DraftKings is also required to ensure that its personnel are trained on all laws, policies, and procedures and Commission‐approved internal controls relevant to each employee’s individual function as it relates to the violations.”

Ohio’s sports betting regulatory body grilling DraftKings on violations as the Massachusetts Gaming Commission also put company execs through their paces regarding unauthorized account funding via credit card payments, which are illegal in Massachusetts. Only debit cards are accepted, as well as prepaid gift cards and cash bets at retail facilities in the Commonwealth.

The infractions in question were funded by credit cards in other states and then carried over to Massachusetts when the customer was physically within the state’s borders to make the bets. According to the MGC, DraftKings permitted 218 customers to place 1,160 online sports bets through credit card funds “for a total handle of $83,663.92.”