Ohio Advertising Regulations: Lotteries, Games and Contests, Fantasy Leagues and Sports Betting

Because Ohio has a state-operated lottery, the state-conducted lottery of any state may be advertised in Ohio under the Federal Charity Games Advertising Act of 1988 (the “FCGAA”). 18 U.S.C. §§ 1307(a).

Yes. The FCGAA also permits broadcast stations to promote any lottery that is not prohibited by the law of the state in which they operate and that is conducted by: (i) a nonprofit, tax exempt organization; (ii) a governmental organization; or (iii) a commercial organization, provided the lottery activities engaged in by the commercial organization are undertaken as promotional and are clearly occasional and ancillary to the primary business of the commercial organization.

A violation of the FCGAA is punishable by a fine up to $200,000 for an organization or imprisonment of up to one year, or both, for each offense. Each day’s broadcast is deemed a separate offense. The FCC also has the power to impose fines and take other administrative action for violations.

Federal law generally preserves the right of states to regulate lotteries and other forms of gambling and the advertising of them. Therefore, all advertisements for lotteries and other forms of gambling, except state-conducted lotteries, must be analyzed under Ohio law.

Article 15, Section 6 of the Ohio Constitution prohibits lotteries and the sale of lottery tickets, but authorizes the Ohio General Assembly to create an agency to conduct a state lottery and to enact statutes legalizing charitable bingo. The Constitution does not define “lottery,” nor does it impose any penalties for a violation of this constitutional prohibition. The Ohio General Assembly has enacted a number of criminal statutes defining and prohibiting various forms of gambling. These laws are discussed in detail below.

Ohio courts have generally defined a lottery as a scheme for the distribution of prizes by lot or chance. The three elements of a lottery are chance, prize and consideration. While chance and prize can usually be easily identified, what constitutes consideration is more problematic, resulting in inconsistent conclusions over the years. Older court decisions hold that consideration is not restricted to money or items of readily ascertainable monetary value, and a 1964 decision of the Ohio Supreme Court holds that if a majority of participants purchase a product to participate, consideration is present, even if a minority participated for free. However, more recent opinions of the Ohio Attorney General, interpreting Ohio’s criminal laws, have taken a more limited view of what constitutes consideration.

Any game or contest conducted by a commercial organization which a broadcast station is asked to promote must be closely evaluated to determine whether any of the three elements of a lottery are present, and it is recommended that a station consult with its legal counsel.

There are limited exceptions to the general prohibition on lotteries. The rules for determining who may conduct permissible games or contests, and limitations on the manner in which the games or contests must be conducted, are complex and must be carefully reviewed to determine if a particular game or contest is legal. The advertising of an illegal game or contest is prohibited under Ohio law.

“Game of Chance”

R.C. § 2915.01(D) defines a “game of chance” as poker, craps, roulette or other game (except bingo) in which a player gives anything of value in the hope of gain, the outcome of which is determined largely by chance. R.C. § 2915.01(E) defines a “game of chance conducted for profit” as a game of chance designed to produce income for the person conducting or operating such game (but does not include bingo). R.C. § 2915.01(C) defines a “scheme of chance” as a slot machine (unless authorized under R.C. Chapter 3772), lottery (unless authorized under R.C. Chapter 3770), numbers game, pool conducted for profit, or other scheme (except bingo, a skill-based amusement machine or a pool not conducted for profit) in which a participant gives valuable consideration for a chance to win a prize. A “scheme of chance” also includes the use of certain mechanical, video, digital or electronic devices which reveal the results of a game entry if valuable consideration is paid for a chance to win a prize under certain circumstances.

R.C. § 2915.02(D) provides that the prohibition against gambling does not apply to:

• Games of chance if all of the following conditions are met:

1. The games are not craps for money or roulette for money;

2. The games are conducted by a specified charitable organization (see answer to question 7 below) that has received an Internal Revenue Service (“IRS”) determination letter stating that it is an organization exempt from federal income taxation under § 501(a) and described in § 501(c)(3) of the Internal Revenue Code;

3. The games are conducted at festivals of the charitable organization, conducted not more than a total of five days a calendar year, and on premises owned by the charitable organization for a least one (1) year preceding the conduct of the games, on premises leased from a governmental unit, or (subject to certain additional limitations specified in the statute) on premises leased from a veteran’s or fraternal organization that have been owned by such lessor for a least one (1) year preceding the conduct of the games;

4. All of the money or assets received from the games after deduction only of prizes paid out during the games are given to a qualifying charitable organization or governmental unit;

5. The games are not conducted during or within 10 hours of a bingo game conducted for amusement purposes only; and

6. No person receives any form of compensation, directly or indirectly, for operating or assisting in the operation of the games.

• Bingo conducted by a licensed charitable organization.

“Pool not conducted for profit”

A “pool not conducted for profit” means a scheme in which a participant gives valuable consideration for a chance to win a prize, and the total amount of consideration wagered is distributed to a participant or participants. A pool not conducted for profit is specifically exempted from the definition of “scheme of chance” in R.C. § 2915.01(C), and therefore legal. Hence, a basketball tournament contest would qualify as a pool not conducted for profit if all of the money wagered is paid out to the winner(s).

“Skilled-Based Amusement Machine”

A skilled-based amusement machine may be lawfully operated in Ohio. A skilled-based amusement machine means a mechanical, video, digital or electronic device that rewards the player, if at all, only with merchandise prizes or with redeemable vouchers redeemable only for merchandise prizes, provided:

• The wholesale value of a merchandise prize awarded as a result of a single play of the machine does not exceed $10.00;
• Redeemable vouchers awarded for any single play are not redeemable for a merchandise prize with a wholesale value of more than $10.00;
• Redeemable vouchers are not redeemable for a merchandise prize that has a wholesale value of more than $10.00 times the fewest number of single plays necessary to accrue the redeemable vouchers required to obtain that prize; and
• Any redeemable vouchers or merchandise prizes are distributed at the site of the machine at the time of play.

In Pickaway Cty. Skilled Gaming L.L.C. v. DeWine, 2011-Ohio-278 (January 25, 2011), the 10th District Court of Appeals held that (i) the $10.00 limitation is not unconstitutionally vague and (ii) the value of a prize awarded for playing a skill-based amusement machine should be determined at the time the prize is obtained by the operator of the machine and not at the time the prize is awarded.

A merchandise prize is any item of value, but does not include:

(i) cash, gift cards or any equivalent thereof;

(ii) plays on games of chance, state lottery tickets, bingo or instant bingo;

(iii) firearms, tobacco or alcoholic beverages; or,

(iv) a redeemable voucher that is redeemable for any of the items listed in (i), (ii) or (iii) immediately above.

A machine that is not skilled-based shall be considered an illegal slot machine, if its pays cash or one or more of the following apply:

• The ability of a player to succeed at the game is impacted by the number or ratio of prior wins to prior losses of players playing the game.
• Any reward of redeemable vouchers is not based solely on the player achieving the object of the game or the player’s score.
• The outcome of the game, or the value of the redeemable voucher or merchandise prize awarded for winning the game, can be controlled by a source other than any player playing the game.
• The success of any player is or may be determined by a chance event that cannot be altered by player actions.
• The ability of any player to succeed at the game is determined by game features not visible or known to the player.
• The ability of the player to succeed at the game is impacted by the exercise of a skill that no reasonable player could exercise.

“Casino Gaming”

Section 15.06 of the Ohio Constitution authorizes casino gaming at four casino facilities in Ohio. R.C. Chapter 3772 authorizes and regulates casino gaming, and R.C. § 3772.03(D)(11) authorizes the Ohio Casino Control Commission (the “OCCC”) to adopt standards regarding the marketing materials of casino operators.  Those standards are set forth in OAC Chapter 3772-13.

OAC Rule 3772-13-01(A) defines the term “advertisement” to include any communication to the public concerning the gaming-related business of a casino operator through broadcasting, publication or other means of dissemination, including electronic dissemination. OAC Rule 3772-13-02(A) requires that each casino operator provide a complete and accurate copy of all advertisements to the executive director of the OCCC at least five business days in advance of public dissemination.  OAC Rule 3772-13-02(B) provides that, for as long as they are publicly disseminated, all advertisements must meet the following criteria:  (1) advertisements shall not obscure any material fact; (2) advertisements shall not depict any individual under the age of 21; (3) advertisements shall be based upon fact, and shall not be false, deceptive or misleading; (4) advertisements shall clearly and conspicuously state the problem gambling hotline established under R.C. §3772.062; (5) advertisements shall clearly and conspicuously specify any material conditions or limiting factors; (6) the advertisement shall clearly and conspicuously state the name and location of the relevant casino facility and (7) if the advertisement is disseminated to a specific individual or individuals, it shall clearly and conspicuously describe at least one of the following methods by which an individual may opt out of receiving future direct advertisements: (a) telephone, (b) regular United States mail or (c) electronic mail.  OAC Rule 3772-13-02(C) provides that casino operators shall cease the public dissemination of an advertisement upon discovery that the advertisement fails to comply with the criteria set forth in the preceding sentence, or to the extent ordered by the executive director of the OCCC.

“Video Lottery Terminal”

R.C. § 3770.21(A)(1) defines the phrase “video lottery terminal” to mean any electronic device approved by the Ohio Lottery Commission that provides immediate prize determinations for participants on an electronic display that is located at a facility owned by a holder of a permit issued by the Ohio State Racing Commission to conduct horse racing in Ohio.  The operation of these terminals is further regulated by OAC Chapter 3770:2.  OAC Rule 3770:2-6-05 provides that the executive director of the Ohio Lottery Commission may prohibit video lottery sales agents from engaging in certain advertising and promotions deemed by the executive director to be inappropriate.  Also, the executive director may initiate advertising and promotional programs and may provide video lottery sales agents with such advertising materials as deemed appropriate.

Certain raffles are legal and may be advertised. R.C. § 2915.02(C) provides that the gambling prohibitions, including the prohibition on advertising, do not apply to gambling expressly permitted by law.

R.C. § 2915.01(CC) defines a raffle as a form of bingo in which one or more prizes are won by one or more persons who have purchased a ticket, with winners determined by drawing a ticket stub or detachable section. A raffle does not include the drawing of a ticket stub or detachable section purchased to attend a professional sporting event if the ticket stub or detachable section is used to select the winner of a free prize given away at the event and the cost of the ticket is the same as the cost of a ticket to the professional sporting event on a day when no free prize is given away.

R.C. § 2915.092 permits a person or entity (see answer to question 7 below), a public school, a chartered nonpublic school, a community school, a veteran’s organization, a fraternal organization or a sporting organization that is exempt from federal income taxation under § 501(a) and described in § 501(c)(3), (c)(4), (c)(7), (c)(8), (c)(10) or (c)(19) of the Internal Revenue Code to conduct a raffle to raise money for the organization or school.

Also, a chamber of commerce may conduct not more than one raffle per year to raise money for the chamber of commerce. These organizations do not need a bingo license to conduct a raffle drawing that is not for profit. Any raffle drawing that is for profit or that is not for profit is illegal unless it complies with R.C. § 2915.092.

R.C. § 2915.02(A)(2) prohibits any person from, among other things, promoting or engaging in conduct that facilitates any game of chance conducted for profit or any scheme of chance. Thus, a station that broadcasts an advertisement for an illegal game or contest may be deemed to be promoting or facilitating the illegal game in violation of this subsection. A violation is a misdemeanor of the first degree, punishable by a fine of not more than $1,000 and/or imprisonment for not more than 180 days. If the offender has previously been convicted of any gambling offense, a violation is a felony of the fifth degree. In addition, advertising an illegal game or contest would likely violate federal law and FCC regulations which, generally, prohibit broadcasting advertisements about illegal games, contests or lotteries. The FCC could impose a fine on the station for such violation, and the violation would be considered by the FCC in the course of the station’s license renewal.

R.C. § 2915.01(H) through (M) contain a series of important definitions. Generally, a “charitable organization” means (i) any organization that has received a determination letter from the IRS that is currently in effect and that states that the organization is exempt from federal income taxation under § 501(a) and described in § 501(c)(3) of the Internal Revenue Code or (ii) a veteran’s, fraternal, volunteer rescue service, volunteer firefighter’s or sporting organization that is exempt from federal income taxation under § 501(c)(4), (c)(7), (c)(8), (c)(10) or (c)(19) of the Internal Revenue Code.

To qualify as a charitable organization, an organization must have been in continuous operations in Ohio for at least two (2) years.

Other limitations also apply. For example:

• A veteran’s organization must be an individual post or state headquarters, or auxiliary unit, of a national veteran’s organization which has been incorporated as a nonprofit corporation and has received a letter from the state headquarters of the national organization indicating that the post or unit is in good standing with the parent organization. The national veteran’s organization must have been in continuous existence for at least five (5) years and be organized by an act of Congress, or have at least 5,000 national dues paying members.
• A volunteer firefighter’s organization must exclusively provide financial support to a volunteer fire department or company recognized by a county, municipality or township.
• A fraternal organization must be a branch, lodge or chapter of a national or state organization (other than a high school or college fraternity) that is not organized for profit and that exists exclusively for the common business or sociality of its members, and that has been in continuous existence in Ohio for at least five (5) years.

The first step is to inquire whether the sponsor has a current annual bingo license from the Ohio Attorney General. Since only charitable organizations which meet the various definitional tests of R.C. § 2915.01(H) may be issued a license, evidence of a current bingo license should be sufficient. If the sponsor does not have a bingo license, the sponsor should be asked to provide evidence of qualifications, including nonprofit and tax exempt status, purposes and activities, date of organization and period of existence.

This type of a raffle would likely be viewed as illegal. R.C. § 2915.092 strictly limits who may conduct a legal raffle to the entities specified in that section, and R.C. § 2915.01(P) broadly defines the activities which may be deemed to constitute “conduct” of a game to include backing, promoting, organizing, managing, carrying on or sponsoring such game. By airing the advertisement, the station could violate R.C. § 2915.02(A)(2) (see question 6 above).

It depends. If the sponsor of the raffle is the school, the raffle is legal under R.C. § 2915.092 and may be advertised. If the sponsor is the booster organization, then it must qualify as a charitable organization in order for the advertisement to be legal. A school booster organization should qualify as a charitable organization if it has an IRS determination letter and has been in existence for two years.

Yes, subject to the two following paragraphs and if the church festival does not have craps for money or roulette for money and its other games and operations comply with R.C. § 2915.02(D).

However, wagering on a videotaped horse race at a “Night at the Races” fund-raising event sponsored by a charitable organization was determined to be an illegal scheme of chance, when the person making the wager was assigned a horse selected randomly by the charitable organization. In that instance, the patrons had no opportunity to exercise their skill or knowledge in choosing the horses. 2006 OHIO ATT’Y GEN. OP., No. 2006-45.

Also, a charitable organization was prohibited from using at a festival sponsored by the organization an automated electronic poker table that enabled players to play poker against each other for a fee, even though there were no awards of prizes or money to the players; the automated electronic poker table was determined to be a “slot machine” under R.C. 2915.01(QQ), thus not a “game of chance” but instead a “scheme of chance” under R.C. 2915.01(C), and therefore an illegal activity under R.C. 2915.02(D). 2013 OHIO ATT’Y GEN. OP., No. 2013-027.

Similarly, a charitable organization was prohibited from using at its festival an automated electronic poker table that enabled players to play poker against each other for money, when the charitable organization kept a percentage of the total amount of money wagered at the table, and awarded prizes or money to the players. 2013 OHIO ATT’Y GEN. OP., No. 2013-030.

Probably yes. Under Ohio law, the shooting contest should be viewed as a game of skill, which is legal, as opposed to a game of chance, which is not legal. State v. Gavlek, 1983 WL 4590, *2 (Ohio App. 7 Dist. 1983) (recognizing football, baseball and golf as games of skill despite the inherent element of luck or chance).

Here, while contestants are selected by chance, the winner of the contest is determined by athletic skill. In addition, it can be argued that there is no consideration because attendees pay the admission charge with no expectation of winning a prize. In addition, if the contest is conducted by the school, the drawing component of the game may be a permitted raffle under R.C. § 2915.092.

The answer is problematic since the contest is being conducted by a commercial organization and the participants must go to the sponsor’s place of business to participate. The contest must be analyzed as a lottery to determine whether the elements of chance and consideration are present.

In this situation, the element of chance is probably present. Courts typically find chance to be present where a prize is awarded “without regard to any man’s choice or will,” and where “human reason, foresight, sagacity or design” does not enable a participant to know or determine the outcome. Fisher v. State, 14 Ohio App. 355 (1921). In contrast to the game in question 12 which involved athletic skill, here the outcome is determined by predicting the top five finishers of an automobile race and a drawing, both of which are beyond the participant’s control. Westerhaus Co. v. City of Cincinnati, 165 Ohio St 327 (1956); Great Atlantic & Pacific Tea Co. v. Cook, 15 Ohio Misc. 181 (1968).

The element of consideration may also be present. Ohio courts have recognized that a lottery exists where a participant was required to pass through a check-out line on a commercial premises in order to obtain a token to participate. State v. Bader, 1922 WL 2019 (1922). Furthermore, where participants merely must enter the premises, the promotion may still be subject to Ohio lottery laws because the element of advertising and increased patronage have been found to supply sufficient consideration for purposes of the Ohio lottery statutes. 1967 OHIO ATT’Y GEN. OP., No. 67-064. (But see question 7 in Part I of the Guide discussing contests, giveaways, and promotions conducted on premises of a retail permit holder.)

While those Ohio decisions and the Ohio Attorney General opinion have not been overturned, many popular promotional games in which some or most contestants participate at retail locations are regularly conducted and advertised and do not result in any enforcement action. In these games, consumers may participate without buying any product and typically may also obtain an entry by mail, visiting a website or other means, without going to the sponsor’s business. On-the-air contests which require a listener or viewer to call the station have not been viewed as including the element of consideration. See FCC v. American Broadcasting Co., 347 U.S. 284 (1954). Similarly, the cost of obtaining and/or sending an entry form by mail or the Internet should not be deemed consideration.

If the sponsor holds a retail liquor permit, the contest must also be analyzed under Ohio’s liquor laws (see Part I of this Guide and question 15 below).

The answer depends on the terms of the promotion. The first issue is whether the promotion includes the element of consideration. On the one hand, the promotion to encourage customers to purchase the product or service in hopes of winning the prize may be considered a “scheme of chance” under Ohio law because the customer must give valuable consideration (purchase the product or service) for the chance to win the prize. If the company was not a charitable organization and would profit in some way from the promotion, R.C. § 2915.02 could forbid its promotion or advertisement. Another issue is whether the promotion could be considered a “raffle” (see the answer to question 5 above).

A 1985 Ohio Attorney General opinion (OHIO ATT’Y GEN. OP., No. 85-013) concluded that this type of promotion was not a scheme of chance because the participants did not give valuable consideration for the chance to win the prize. In that case, a military credit union conducted a sweepstakes whereby persons who obtained loans from the credit union were eligible for a chance to win prizes. The Attorney General concluded that because the participants did not, in all probability, give valuable consideration for a chance to win the prize (emphasis added), the promotion was not a scheme of chance within the meaning of R.C. § 2915.01(C).

Under different facts, however, a promotion may be deemed to be illegal. For example, assume that a retailer runs a promotion where everyone who purchases a TV during a certain period of time is automatically entered in a drawing for a cash prize. In the past, the Ohio Attorney General has informally advised the OAB’s Ohio legal counsel that it may consider this to be a raffle and, because the raffle is not being conducted by a charitable organization as required by R.C. § 2915.092, the raffle would be illegal.

An Ohio Attorney General opinion, however, seems to reach a different conclusion. In OHIO ATT’Y GEN. OP., No. 2013-012, the Attorney General determined that an Ohio insurance company was not conducting an illegal raffle when its automobile insurance policies granted policyholders the opportunity to be selected randomly for cash prizes, unless there was evidence that the predominant purpose for the sale of the policies was to promote drawings for the cash prizes. Further, the Attorney General stated that the insurance company was not operating an illegal scheme of chance or game of chance, unless there was evidence that the predominant purpose for the sale of the policies was to circumvent Ohio gambling laws. In this case, language within an insurance policy provided that the policyholder was eligible for a $5,000 cash award if the policy was active as of an eligibility date and had been in effect, with no lapse in coverage, for at least 180 days preceding the eligibility date. The insurance company would identify, four times each year, the policies that satisfied the requirements, randomly select a policy number from the eligible policies and award the winning policyholder $5,000. The Attorney General opined that while the lottery elements of chance and prize were present, the policyholder did not pay consideration for a chance to win a prize; rather, the consideration paid by the policyholder was for automobile insurance. The Attorney General concluded this was a legitimate promotion of the sale of insurance as opposed to a promotion utilized to legitimize illegal gambling, and that the predominant purpose of the promotion was to sell policies rather than to sell chances to win prizes.

The Attorney General informally advised the OAB’s Ohio legal counsel that because the possible winners were existing customers (who were continuing to pay for their insurance), the consideration was not being paid by the policyholders for a chance to win the prize. The Attorney General further noted that the yearly amount of cash prizes awarded dwarfed the amount of premiums the insurance company received. Finally, the Attorney General also determined that the insurance company was not conducting a raffle because the insurance company did not sell “tickets” to promote the cash prizes (which seems inconsistent with the informal advice given with respect to the TV retailer promotion discussed above).

It is important to note that the Attorney General emphasized that it was not determining whether the insurance company’s promotion would be found by a court to be an illegal scheme of chance, game of chance or raffle. While Ohio Attorney General opinions are persuasive authority to be considered by a court, those opinions are not binding on the court. Accordingly, this opinion, like the military credit union opinion, should be read as being limited to its facts. It is uncertain as to whether the Ohio Attorney General or a court would reach a similar conclusion if the company running the promotion was not an insurance company, credit union or other entity subject to extensive regulation by governmental agencies (although the two Attorney General opinions discussed above did not mention the regulated aspects of the credit union or insurance business.)

It is not clear whether such events can be advertised.

In addition to restrictions which apply to holders of retail liquor permits (see Part I of this Guide), R.C. § 2915.04 prohibits a person from making a bet or playing a game of chance or scheme of chance at a hotel, restaurant, tavern, store, arena, hall or other place of public accommodation, and prohibits the owner or operator of any such establishment from recklessly permitting those premises from being used for such public gambling.

The legality of such events will turn on whether players provide consideration to participate.

Probably yes. In 1999, the United States Supreme Court held that § 1304 of the FCGAA could not be applied to prohibit the broadcast of advertisements for private casino gambling by radio and television stations located in states where such gambling is legal. Greater New Orleans Broadcasting Ass’n v. United States, 527 U.S. 173 (1999). As noted above, R.C. § 2915.02(C) does not prohibit conduct in connection with gambling expressly permitted by law. While there are no legal authorities on this point, the language is broad enough to include activities which are expressly permitted by the laws of other states.

Yes. Horse racing is authorized by the Ohio State Racing Commission which regulates the approval of permits for horse racing. R.C. § 3769.06. To date, the Racing Commission has not promulgated any rules which govern the advertising of horse racing. Instead, it regulates the “telecast, for wagering purposes, of audio and visual signals of live horse races.” R.C. § 3769.25 (Emphasis added). At the federal level, Congress has made an explicit policy choice to give states the primary responsibility for determining what forms of gambling are permissible within their borders. 15 U.S.C.A. § 3001 (1978) (Interstate Horse Racing Act) has no provisions related to advertising.

The FCC has a specific regulation (47 C.F.R. § 73.1216) for a broadcast licensee that broadcasts or advertises information about a contest it conducts. (The FCC defines “contest” very broadly to include any scheme in which a prize is offered or awarded, based on chance, diligence, knowledge or skill, to the public.) A station that broadcasts information about a contest it is conducting is required to fully and accurately disclose all the “material terms” of the contest. The FCC defines “material terms” to typically include, at a minimum, information such as: how to enter; eligibility restrictions; entry deadlines; whether and when prizes will be awarded and, if so, the nature, number and value of the prizes; how and when winners will be selected; the chances of winning; and tie-breaking procedures (if any).

All the “material terms” must be disclosed when the contest is first announced either (i) through an initial broadcast and then periodic broadcasts such that all material terms are announced a “reasonable” number of times on air during the contest or (ii) through written disclosures on that station’s Internet website, the licensee’s website or, if neither the station nor the licensee has a website, any website that is publicly accessible. If a station discloses the material terms of the contest on the Internet, the station must (i) establish a conspicuous link or tab to material contest terms on the home page of the website, (ii) announce over the air periodically the availability of the material terms on the website and identify the website address where the material terms are posted with information sufficient for a consumer to find such terms easily and (iii) maintain the material contest terms on the website for at least 30 days after the contest has concluded. In addition to these disclosures, a station should have a written copy of the rules governing the contest available to the public at the station.

The contest must be conducted in accordance with the terms that are disclosed. The FCC has fined stations for failing to comply with the FCC’s station-conducted contest regulation. Further, it is also important to evaluate all promotions to ensure that they do not run afoul of lottery laws.

Finally, stations should consult their legal counsel or accountants regarding any tax withholding, filing or other tax-related obligations of the stations in connection with distributing prizes to winners of station-conducted contests.

“Internet cafes” or “sweepstake parlors,” generally speaking, are establishments where patrons purchase prepaid cards for telephone or internet access time, receive “sweepstake points” for purchasing that time, and then use the prepaid cards and the sweepstake points to play slot machine-like games for a chance to win cash prizes.

R.C. § 2915.01(BBB) defines “sweepstakes” to mean any game, contest, advertising scheme or plan, or other promotion where consideration is not required for a person to enter to win or become eligible to receive any prize, the determination of which is based upon chance (but it does not include legal bingo, lotteries conducted by the Ohio Lottery Commission or casino gaming as authorized by R.C. Chapter 3772). R.C. § 2915.02(A)(5) provides that no person shall conduct, or participate in the conduct of, a sweepstakes with the use of a “sweepstakes terminal device” (defined in R.C. § 2915.01(AAA)) at a “sweepstakes terminal device facility” (defined in R.C. § 2915.01(AAA)(2)(d)) and give any cash, gift cards, plays on games of chance, state lottery tickets, firearms, tobacco, alcoholic beverages, or a redeemable voucher for any such item, or any prize or redeemable voucher for a prize, the wholesale value of which is in excess of $10.00 and which is awarded as a single entry, for playing or participating. R.C. § 2915.02(A)(6) provides that no person shall conduct, or participate in the conduct of, a sweepstakes with the use of a sweepstakes terminal device at a sweepstakes terminal device facility without first obtaining a certificate of registration from the Ohio Attorney General and annually, thereafter, obtaining a certificate of compliance. R.C. § 2915.02(G) provides a person may apply to the Ohio Attorney General for a certificate of compliance that the person is not operating a sweepstakes terminal device facility.

Accordingly, any establishment which conducts sweepstakes with the use of a sweepstakes terminal device at a sweepstakes terminal device facility without the required Ohio Attorney General registration required under R.C. § 2915.02(A)(6) or the certificate of compliance required under R.C. § 2915.02(G) is in violation of Ohio law. Further because R.C. § 2915.01(P) defines “conduct” broadly and to include promoting any sweepstakes, a station, which runs an advertisement for such an establishment, could be found to be in violation of Ohio gambling laws.

As more fully described below, an advertisement can be broadcast in Ohio for a fantasy contest, provided that the fantasy contest operator has been licensed by the OCCC. A list of licensed fantasy contest operators can be found at https://casinocontrol.ohio.gov/FantasyContests/Licensing.aspx.

31 U.S.C.S. § 5363 provides that no person engaged in the business of betting or wagering may knowingly accept, in connection with the participation of another person in unlawful Internet gambling, credit, electronic fund transfers, checks, or the proceeds of any other form of a financial transaction. However, 31 U.S.C.S. § 5362(1)(E)(ix) provides that the terms “bet” or “wager” do not include participation in any fantasy sports game or contest in which (if the game or contest involves a team or teams) no fantasy sports team is based on the current membership of an actual team that is a member of an amateur or professional sports organization (as those terms are defined in 28 U.S.C.S. § 3701) and that meets the following conditions: (a) all prizes and awards offered to winning participants are established and made known to the participants in advance of the game or contest and their value is not determined by the number of participants or the amount of any fees paid by those participants, (b) all winning outcomes reflect the relative knowledge and skill of the participants and are determined predominantly by cumulating statistical results of the performance of individuals in multiple real-world sporting or other events, and (c) no winning outcome is based (1) on the score, point spread, or any performance of any single real-world team or any combination of such teams or (2) solely on any single performance of an individual in any single real-world sporting or other event.

R.C. § 3774.01(C) defines the phrase “fantasy contest,” for purposes of Ohio law, to mean a simulated game or contest with an entry fee that satisfies all of the following conditions: (a) the value of all prizes and awards offered to winning fantasy contest players is established and made known to the players in advance of the contest, (b) all winning outcomes reflect the relative knowledge and skill of the fantasy contest players and are determined predominantly by accumulated statistical results of the performance of managing rosters of athletes whose performance directly corresponds with the actual performance of athletes in professional sports competitions, (c) winning outcomes are not based on randomized or historical events, or on the score, point spread, or any performance of any single actual team or combination of teams or solely on any single performance of an individual in any single actual event, and (d) the game or contest does not involve horses or horseracing.

R.C. § 3774.09 provides that fantasy contests offered in accordance with R.C. Chapter 3774 and the rules adopted by the OCCC are exempt from R.C. Chapter 2915 (the Ohio gambling laws).

R.C. § 3774.06(B)(3) provides that a fantasy contest operator operating in Ohio shall not employ false, deceptive or misleading advertising, or advertising that is not based upon fact.

The OCCC has adopted rules governing advertisements of fantasy contests. OAC Rule 3772-74-01(B)(1) defines the term “advertisement” to mean any notice or communication to the public or any information concerning the fantasy contest-related business designed to solicit or entice fantasy contest players to participate in fantasy contests of a fantasy contest operator through broadcasting, publication or any other means of dissemination. OAC Rule 3772-74-16(A) provides that fantasy contest operator advertisements shall (i) accurately depict any representations made concerning the fantasy contest player’s chances of winning, the average number or percent of fantasy contest players who win, and the average net winnings of fantasy contest players, (ii) include information on playing responsibly and seeking assistance for compulsive behavior or shall direct consumers to a reputable source for such information (if the advertisement is not of sufficient size or duration to reasonably permit inclusion of such information, that advertisement shall refer to a website or application that does prominently include such information) and (iii) clearly and conspicuously state all material or limiting terms or provide a reference where all material or limiting terms may be found (the reference material shall be publicly available and shall, itself, state the terms clearly and conspicuously). OAC Rule 3772-74-16(B) provides that fantasy contest operator advertisements shall not (a) prominently depict anyone who is under the age of 18, (ii) depict or imply the endorsement of any university, college, high school, youth sporting league, event or athlete or (iii) depict fantasy contests that are not compliant with fantasy contest law.

In 2018, the United States Supreme Court struck down the Professional and Amateur Sports Protection Act which made it unlawful for a state to, among other things, advertise or promote any gambling “schemes” based on competitive sporting events. This decision paved the way for states to legalize sports betting and, consequently, to provide a new advertising revenue stream for radio and television stations.

On March 23, 2022, R.C. Chapter 3775 became effective legalizing sports betting in Ohio, as of January 1, 2023. This Chapter provides a comprehensive licensing and regulatory framework under the jurisdiction and rulemaking authority of the OCCC. R.C. § 3775.02(B)(10) sets forth the following restrictions with respect to sports gaming proprietors’ advertisements:

(a) the advertisement must clearly convey the conditions under which sports gaming is being offered, including information about the cost to participate and the nature of any promotions and information to assist patrons in understanding the odds of winning;

(b) the advertisement must disclose the identity of the sports gaming proprietor and, if applicable, the mobile management services provider or management services provider;

(c) the advertisement must not target individuals under twenty-one years of age, other individuals who are ineligible to participate in sports gaming, problem gamblers, or other vulnerable individuals;

(d) the advertisement must include messages designed to prevent problem gambling and provide information about how to access resources related to problem gambling; and

(e) the advertisement must not be false, misleading or deceptive to a reasonable consumer.

OAC Rule 3775-16-08 further provides that:

• All sports gaming advertisements must:

(1) Clearly convey any material conditions or limiting factors, which must be clearly and conspicuously specified. If an advertisement is not of sufficient size or duration to permit inclusion of such information, that advertisement shall refer to a website or application that does prominently include such information within one click; and

(2) Clearly and conspicuously include messages designed to prevent problem gambling and provide information about how to access resources related to problem gambling, including one of the following: (a) the national council on problem gambling’s twenty-four hour confidential helpline; (b) the Ohio problem gambling helpline number [1-800-589-9966]; or (c) another helpline approved by the OCCC that is free of charge to the caller.

• Sports gaming advertisements must not:

(1) Depict any individual under the age of twenty-one, except live footage or images of athletes in sporting events on which sports gaming is permitted. Any individual under the age of twenty-one may not be depicted in any way that may be construed as the underage individual participating in or endorsing sports gaming;

(2) Obscure any material fact; or

(3) Promote irresponsible or excessive participation in sports gaming, or suggest that social, financial, or personal success is guaranteed by engaging in sports gaming.

• A sports gaming proprietor must not advertise or promote on college or university campuses located in the state of Ohio except for generally available advertising, including television, radio, and digital advertising. Any advertisement shown to be targeting the area of a college or university campus is not generally available and will be a violation of this Rule. [Note: the Ohio High School Athletic Association, which governs athletic programs for junior and senior high schools, forbids advertisements for gambling of any kind.]
• Sports gaming advertisements, including logos, trademarks, or brands must not be used, or licensed for use, on products, clothing, toys, games, or game equipment intended primarily for persons under twenty-one years of age.

A sports gaming proprietor must cease the dissemination of an advertisement upon discovery that the advertisement fails to continue to comply with this Rule or if required by the OCCC because the advertisement fails to comply with R.C. Chapter 3775, or the rules adopted thereunder, or otherwise undermines the integrity of sports gaming.

With respect to the disclosure of a problem gambling helpline, the OCCC has stated in the FAQs on its website that, while any one of the numbers set forth in the Rule is acceptable, the OCCC expects greater usage of the national council’s helpline [1-800-GAMBLER], as the OCCC recognizes the multi-jurisdictional realities in sports gaming advertising. The OCCC indicates that the number must be conspicuous and clearly denoted as a resource for those needing assistance with problem gambling; failure to ensure the number is conspicuous may result in administrative action.

The OCCC has stated that “conspicuous” means obvious or attracting attention. While the OCCC understands the message of the advertisement itself needs to be the focus, the OCCC notes “there is no excuse for the responsible gambling tagline to be in the smallest font, lowest voice, or fastest speech in the advertisement; doing so is clearly not conspicuous, as required by law, and calls into question any operator’s commitment to responsible gambling.”

The OCCC is also concerned about advertisements being on questionable platforms or college campuses, which may be reaching individuals under the age of 21. The OCCC has stated that advertisements which target individuals under the age of 21 may result in administrative action.

However, generally, the OCCC’s regulatory jurisdiction only extends to persons and entities that are involved in gambling services industries.  Thus, if a licensed sportsbook operator uses an advertising message that violates OCCC regulations, the OCCC’s enforcement authority typically only extends to the sportsbook operator.  As the OCCC was drafting its sports gaming rules, OAB representatives (including legal counsel) met virtually with OCCC staff to clarify that Ohio broadcasters would not be in the “line of fire” for any questionable advertising practices used by Ohio-based sportsbook operators.  During that meeting, the OCCC indicated that it does not intend to take enforcement action against broadcasters for deficiencies in advertisements placed by gaming industry members.

Stations may choose to assist their sports wagering advertising partners with at least two of the OCCC concerns.  First, broadcasters can steer sportsbook advertisers away from programming and dayparts that target the under-21 crowd. Second, when screening advertisements before airing, broadcasters can listen/look for responsible gaming (“RG”) disclosures.  As mentioned above, all gambling advertisements are required to disclose a toll-free gambling helpline, and stations can bring the absence of the toll-free number to the attention of the advertiser.

It is important for the station to exercise caution if it chooses to produce spots for sportsbook operators and permit station talent to endorse sports wagering services on station-owned assets.  There is no prohibition on stations writing copy or producing spots for, or lending talent voices to, sportsbook advertisers.  But when a station provides these services, it changes the risk calculus because the station itself is now involved in the creation of the messaging.  If the station produces a spot and fails to include an RG disclosure, the advertiser may blame the production team when the OCCC takes unfavorable action against the sportsbook operator.  As with any advertiser for whom a station produces advertising, the station will be well-served to obtain approval of the final product in writing from the advertising client prior to broadcast and, of course, no station should ever give an advertiser legal advice about the necessity, substance or format of product/service-specific on-air disclosures.

If station talent is asked to endorse a sportsbook operator’s products and services, FCC and FTC disclosure requirements may come into play.  Not only might the FCC’s sponsorship identification rule require a “paid for by” or “sponsored by” tag, but the FTC’s endorsement guidelines may also be triggered and may require the talent to have actually used the sportsbook services and disclose any non-obvious “material connection” between the sportsbook operator and the talent.  Whether and to what extent the FCC’s or FTC’s regulations will be triggered will depend on the nature and format of the promotional messaging, and stations should contact legal counsel when facing these types of opportunities.

Lastly, the OCCC website (https://casinocontrol.ohio.gov) and its sports gaming FAQs should be periodically reviewed for updated guidance on sports gaming advertisements.

Probably yes. As discussed in Question 16 above, (i) the United States Supreme Court held that § 1304 of the FCGAA could not be applied to prohibit the broadcast of advertisements for private casino gambling by radio and television stations located in states where such gambling is legal, (ii) R.C. § 2915.02(C) does not prohibit conduct in connection with gambling expressly permitted by law and (iii) while there are no legal authorities on this point, the language in R.C. § 2915.02(C) is broad enough to include activities which are expressly permitted by the laws of other states, including sports wagering. While the Greater New Orleans Broadcasting case discussed in Question 16 above only addressed brick-and-mortar casino gambling, the same principles that were at issue in that case would likely be applicable to a brick-and-mortar sportsbook operation that is legal in another state and wishes to advertise in Ohio. Also, the OCCC, in its FAQs, stated that it has been aware that sports gaming advertising has been present in Ohio for some time, through multi-jurisdictional advertisements of online sports gaming, and does not plan to prohibit multi-jurisdictional advertising. Lastly, advertisements for out-of-state sportsbook operators must indicate those services are not available to users located in Ohio.