HomeOhio Sports Betting NewsJake Paul Pays Six-Figure Fine to SEC And Ohio Regulators Are Taking Notice

Jake Paul Pays Six-Figure Fine to SEC And Ohio Regulators Are Taking Notice

Professional boxer and social media influencer Jake Paul last week paid just over $100,000 to the U.S. Securities and Exchange Commission to settle a case involving a 2021 comment on the Twitter website that promoted a cryptocurrency company.

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That could land Paul in hot water in particular in Ohio, which already has levied six-figure fines against several sportsbooks for various violations. Paul has been granted a provisional sports betting license there for his Betr Sportsbook as a “key sports gaming employee.”

The Ohio Casino Control Commission has yet to finalize his proposed three-year license, and a spokeswoman told a local news outlet that the payment of the fine could come into play on the commission’s decision.

“Suitability is an ongoing requirement for all commission licensees and applicants, and the commission has the authority to reopen a licensing investigation at any time,” said Jessica Franks.

“The commission is aware of the recent action taken by the SEC against Mr. Paul and will follow our standard process in reviewing the allegations and settlement. The commission will not prejudge any outcome, and any action taken by our agency will be done in accordance with Ohio laws, rules, and the administrative hearing process.”

Ohio’s sports betting regulations allow the commission to “limit, condition, restrict, suspend, or revoke any license” for noncompliance of the state’s gambling laws.

Betr’s betting focus centers on so-called “in-play” bets, which can take place in rapid fashion during sporting events. Paul is a key promoter with tens of millions of followers collectively on social media platforms such as Twitter, TikTok, and Instagram.

Massachusetts Also Has Questioned Paul

The relative youth of Paul’s audience led one member of the Massachusetts Gaming Commission to oppose his ultimately successful effort to gain approval in that state in January.

Ohio regulations state that “Sports gaming advertising must not … target individuals under the age of twenty-one.”

Betr succeeded in Massachusetts in part because a company executive pointed out that it has strict policies designed to prevent underage individuals from betting, as well as limits on bettors age 21 to 25.

Paul, along with actress Lindsay Lohan, was among those who were paid a “bounty” by Tron Foundation founder Justin Sun to promote his crypto assets Tronix (TRX) and BitTorrent (BTT).

“Tron, through an intermediary, paid Paul in crypto assets, valued at approximately $25,019, for this promotion and provided Paul with the specific language to include in the Tweet,” the SEC alleged in a statement. “Paul did not disclose that he had been paid by Tron, nor the amount of compensation he received from Tron and Sun for promoting the TRX offering on Twitter.”

The settlement by Paul was to pay back the $25,019 plus a tripled civil penalty of $75,057.

A section of the SEC’s Securities Act states that it is “unlawful for any person to publish, give publicity to….[a security] for consideration received or to be received.”

The settlements by Paul, Lohan, and several other celebrities were not an admittance or a denial of guilt.

SEC enforcement leader Gurbir Grewal said in a statement that “Sun paid celebrities with millions of social media followers to tout the unregistered offerings, while specifically directing that they not disclose their compensation.

“This is the very conduct that the federal securities laws were designed to protect against regardless of the labels Sun and others used.”

Ohio Has Aggressively Pursued Sports Betting Violations

Earlier this month, BetMGM elected to waive any appeal of a $150,000 fine by the commission.

“Advertisements from BetMGM, Caesars, and DraftKings lacking the appropriate responsible gambling messaging appeared after the Commission issued explicit guidance on the matter, on December 30, and directed all operators to immediately ensure that their advertising was compliant,”

Matthew Schuler, the commission’s executive director, said in a statement.

“In addition to ads lacking the appropriate responsible gambling messaging, all three companies also advertised promotions or bonuses described as ‘free’ or ‘risk-free’ when patrons were required to incur a loss or risk their own money to obtain the promotion.”

“Commission rules on promotions and bonuses … prohibits the use of the word or phrase ‘free’ or ‘risk-free’ in sports gaming promotions where a patron must spend their own funds to obtain the promotional value.”

In February, the commission fined DraftKings $500,000 and levied a fine of $250,000 to Penn Entertainment – the parent company of the controversial Barstool Sports brand – for regulatory violations.

In addition to offending “risk-free” promotional material, DraftKings also was found to have mailed out thousands of advertising materials to individuals under the age of 21. Barstool, the commission noted, played host to a promotional event at the University of Toledo in November that encouraged students to sign up for the company’s sports betting app – another violation.

Caesars accepted its own $150,000 fine in January, blaming its marketing error about “risk-free betting” on an unnamed partner that the company said has been terminated.

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