According to Ohio Casino Control Commission (OCCC) executive director Matt Schuler, the commission was already overseeing fantasy contests in the state before sports betting was launched, with clear guidelines on what constitutes a fantasy contest. This further proves that it is one of the stricter sportsbook regulators in the U.S.
What Constitutes a Daily Fantasy Sports Contest
Schuler also said fantasy sports apps that enable betting on athlete performances are viewed as “games of skill” disguised as “illegal casinos.” Therefore, the state’s sports betting regulators are acting against these individual players’ performance-based “prop bets” disguised as daily fantasy sports products with the minimum age requirement of 18 years old.
Such offerings are available at licensed Ohio sportsbooks but are prohibited under the Ohio Administrative Code for fantasy sports. Licensed app StatHero and defunct platform Monkey Knife Fight are examples of companies walking a thin line between sports betting and DFS contests.
There are several criteria that operators must fulfill to be recognized as a fantasy contest. These include;
- having an entry fee
- informing players about the prize value in advance
- ensuring that participants use their knowledge and skill to compete against each other without the house being involved
Once operators deviate from these established guidelines, they will automatically violate the law, as Schuler explained.
Despite these differences, both fantasy contests and sports betting have several similarities, including that youth or collegiate-level sports are prohibited from the DFS catalogs in Ohio, and operators are not permitted to advertise to minors.
According to Aleah Page, OCCC manager of casino gaming and fantasy contest licensing, the commission has issued 23 fantasy licenses since February 2020, with two permits being renewed. Notable operators like DraftKings, FanDuel, and Underdog Sports hold both Ohio fantasy licenses and sports betting permits.
StatHero’s License Revoked
In November 2022, the OCCC took action by revoking StatHero’s fantasy sports license for its continuous offering “against the house” fantasy contests.
“StatHero continued to advertise ‘against the house’ fantasy contests in Ohio via its national website, including the ‘Head 2 Head’ and ‘Pick’Em’ contests in violation of Ohio Adm. Code 3772-74-16, and offered Survivor contests to Ohio patrons, which was advertised by StatHero as an ‘against the house’ contest,” an agreement between the OCCC and StatHero’s parent company Two Nine Sports Inc. reads.
Schuler mentioned that the staff is actively monitoring other fantasy operators who may be violating the rules and could potentially receive cease-and-desist letters.
The state is firmly committed to upholding integrity and compliance in its sports betting market, and these measures aim to ensure a transparent and well-regulated industry.
Daily Fantasy Sports Regulation and Classification
DFS was legalized in the state under HB 132. The law receives support from the Columbus Crew, Cleveland Indians, Cincinnati Reds, and the Fantasy Sports Trade Association.
Despite being regulated by the same state authorities, the classification as a fantasy sports or sports betting provider entails different legal and financial implications.
In Ohio, fantasy sports licenses range in cost from $3,000 to $30,000, depending on the size of the user base. Sportsbook licenses are more expensive, ranging from $1 million to $6.67 million based on the type of operator and the number of brands.
Sports betting licensure also requires affiliation with an Ohio-based business, potentially incurring additional expenses in partnership fees.
Compliance costs are lower for fantasy contests, and no fantasy contest tax exists. The legal age for players is 18, whereas it’s 21 for casino gaming and sports betting.