Despite a pandemic and a massive corruption scandal in the Ohio House unrelated to gambling, the state looks poised to get sports betting done in 2020.
According to reports, key Ohio lawmakers have finally cleared the primary hurdle for legalization: which state entity will provide oversight on the sports gambling industry. The House bill that passed earlier this year called for the Ohio Lottery Commission to be the chief regulator, while the Senate bill, which hasn’t cleared that chamber, put control with the Ohio Casino Control Commission. It’s now clear that the OCCC would be the regulator, which isn’t surprising considering Senate sponsors refused to waver and Gov. Mike DeWine has long indicated an OCCC preference. It has regulated casinos for nearly a decade.
According to GamblingCompliance (paywall), a consensus sports betting proposal would likely give three sports betting skins to each of the four casinos and seven racinos and charge the industry a tax rate under 10%. There’s no indication that Ohio would ban wagering on in-state collegiate teams, as was discussed in the past, or require in-person mobile registration. All of this is very industry-friendly.
Despite DeWine indicating he wasn’t fond of the lottery as the regulator, the House still passed its bill in May. The bill was more or less dead on arrival in the Senate. Groups such as fraternal and veterans organizations were asking for sports gambling kiosks, but that opportunity reportedly isn’t in the new draft bill, so it looks like big business won out here. Bowling alleys in Ohio were also fighting hard to have some involvement in a sports gambling industry. The legislation is likely to leave many people in Ohio disappointed, but it’s a win for massive publicly traded firms.
A copy of the draft bill hasn’t been made public. Ohio is expected to take up efforts to cross the finish line on sports betting later this fall, with potential signature from DeWine before the end of the year. That could mean retail sportsbooks in Ohio in the spring, with online/mobile books launching by next football season. A hard timeline is unlikely to be included in statute.
Is Ohio ready for sports betting?
The Buckeye State is a coveted prize for the casino gambling industry, looking to get a foothold through sports betting to eventually offer more lucrative products such as online slots and online table games. Ohio hasn’t formally considered legal online casino games, but there have been rumblings in the past.
With the seventh largest population in the country and strong sport fan bases, Ohio represents a big missing piece of the puzzle for the nascent U.S. sports betting industry. Ohio neighbors Indiana, Michigan, and Pennsylvania have all legalized the activity, and the latter two have also approved online casino gambling. Indiana has started to flirt with an online casino proposal.
An Oxford Economics analysis of the U.S. sports betting potential pegged Ohio as a state capable of seeing about $10 billion in annual handle, generating about $600 million in annual taxable gaming revenue, assuming mobile apps and a low tax rate. To put that into context: Ohio’s casino gambling industry won $1.94 billion from players in 2019. Even with some cannibalization of existing gambling, that is a very meaningful addition to the state’s legal casino gambling market.
The future looks rosy for Ohio casino operators, which include the likes of Penn National Gaming and MGM Resorts. The betting public gets the convenience of mobile wagering and a flurry of promotional offers that if played right can give many bettors some extra cash. Still, Ohio is a state that is apparently lacking when it comes to government responsible gambling efforts.
According to an analysis by the American Gaming Association, it’s unclear if the state of Ohio is using its problem gambling funding for its intended purpose. The AGA found that in fiscal year 2019 Ohio had $9.1 million in gaming taxes available for responsible gambling initiatives. The AGA couldn’t determine if all of the responsible gambling allocation was actually used because public accounting wasn’t available.
According to Play It Safe Ohio, 8.2% of Ohioans who participate in casino gambling are estimated to be at low risk, moderate risk, or meet criteria for problem gambling. That’s compared to 4.8% for lottery gambling and 5.1% for “other gambling.” Sports betting also leans younger, and, according to the group, “problem gambling rates among teens and young adults have been shown to be 2-3 times that of adults.”
It’s unclear what problem gambling funding Ohio will ultimately have for regulated sports betting. Currently, just 2% of the state’s 33% cut of commercial casino revenue goes toward the problem gambling and addiction fund, according to the AGA.
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