CINCINNATI — Jake Paul is still an owner and co-founder of the online sportsbook known as Betr. But in the eyes of Ohio gaming regulators, he is no longer a “person in control” of the company.
And that solves a problem for Betr Holdings Inc., a Miami, Fla.-based company that has one of 20 online sportsbooks licenses in Ohio. The licensing of key employees is an ongoing requirement for sportsbooks. The Ohio Gaming Control Commission was about to scrutinize Paul’s license when it decided he no longer needs one.
Paul is an Ohio native who rose to fame on social media before becoming a professional boxer in 2018. He was among eight celebrities accused of violating securities laws by promoting a cryptocurrency investment on Twitter in 2021 without disclosing they were paid to do so. Paul paid $101,997 to settle with the U.S. Securities and Exchange Commission without admitting liability.
In March, state officials said they would consider Paul’s SEC settlement in a June review of his “key gaming employee” license. Betr asked Ohio to let Paul withdraw his license application in a May 18 email.
“We believe Mr. Paul no longer has control over Betr as defined under Ohio statute,” wrote John Wellendorf, director of regulatory affairs for Betr’s consulting firm, Online Compliance. Wellendorf explained that Paul left the company’s board and “is no longer employed as president of Betr Holdings Inc.”
Ohio granted Betr’s request one day later without explanation, records show.
“The process of becoming a regulated entity in a new market is often very challenging,” said Ian Messenger, president of the Association of Certified Gaming Compliance Specialists in Toronto. “Having an SEC violation could certainly pose a distraction. It certainly would bring in additional questioning and may affect suitability. That may be a reason why Jake Paul was removed.”
Betr CEO Joey Levy did not respond to an email from the WCPO 9 I-Team that requested information about its Ohio strategy and interviews with Levy and Paul, as co-founders of the company.
Asked to explain its decision, the Ohio Gaming Control Commission provided a statement that includes:
"In conjunction with the request to withdraw Jake Paul’s application, the Commission received further information from Betr. Based on this information from Betr, the commission determined Mr. Paul no longer was required to obtain a sports gaming key employee license, as defined in Ohio law. Betr has an ongoing responsibility to remain suitable for licensure (as do all licensees) – we are regularly in contact with them on compliance, licensing and other matters."
Betr is one of Ohio’s smallest online sportsbooks, raking in an average of $670,000 in monthly bets from January to September. Market leaders Draft Kings and FanDuel, by contrast, average roughly $200 million in wagers each month.
In addition to low market share, Betr has been criticized for its use of social media to attract bettors.
One member of the Massachusetts Gaming Commission voted against Betr’s license approval in January, citing “concerns about the social media audience” that Paul and Betr have accumulated as part of their marketing strategies. Commissioner Eileen O’Brien questioned whether young followers were being primed to “jump into” sports betting when they turned 21. The company said it has rigorous policies to prevent underage betting and deposit limits on bettors aged 21 to 25. The commission voted 4-1 to approve Betr’s license.
Messenger said such criticism is an argument against letting Betr compete in Ohio without requiring Paul to be licensed.
“Jake Paul’s stardom and fame is a heavy driver for the Betr business model,” Messenger said. “That’s not necessarily a bad thing. But we do have to be conscious that Jake Paul appeals to a younger demographic. And the question for regulators in Ohio and elsewhere is whether Jake Paul is really appealing to those under the legal age to engage in gambling activities.”
Ohio’s sports-betting law says a key employee includes “any executive, employee, or agency, having the power to exercise significant influence over decisions concerning any part of the applicant's business operation.”
Messenger thinks Paul fits that definition, based on a June 27 press release that describes him as an investor in a $35 million Series A financing round and the creator of the BS w/ Jake Paul podcast. The release called the podcast a "flagship franchise" for Betr’s media division, helping it recruit bettors at a low cost.
“Betr Media's unique approach of creating culture as opposed to reposting culture is also informing unprecedented media-audience-to-product conversion, with over 20% of Betr Media's estimated Ohio audience already converting to real money gaming customers for Betr Gaming,” said the release.
An Oct. 16 YouTube video suggests Paul is involved in the company’s management. In the video, he offers a tour of Betr’s new headquarters, telling viewers about a conference room where “we do a lot of like investor calls, pitch calls, big idea calls.” He points out key employees in the video, describes the company’s strategy and says, “I love this company. I founded this company. I built it from the ground up with our CEO Joey Levy.”
A spokesman for the Massachusetts Gaming Commission said it considers Paul to be a “qualifier,” meaning he’s among the key employees who must meet “all qualifications for licensure,” under its sports gaming law. Betr was awarded a temporary license in February and is currently undergoing a full suitability review in Massachusetts.
Last November, Paul signed Betr’s application for a sports betting license as the company’s president. But an April 2023 filing with the state of Florida listed Paul as a director and vice president. The company’s website does not list Paul among its ten board members. It describes Paul as a founder and executive with the company.
“Jake Paul seems, in my opinion, to have a significant amount of influence,” Messenger said. “It may not be control, in terms of being the president or being on the board of Betr Gaming, but he certainly has significant influence on its fortunes and activities by his control and involvement in Betr Media.”
