Ohio Sports Betting

Future Legal Online Sportsbooks

As of late September, the Buckeye State is nearing the end zone on a multi-year process to expand gambling once again.

Ohio, surrounded almost entirely by states with legal sports betting, stands for now as a large anomaly bucking a Midwestern trend that has seen neighbor after neighbor legalize the activity since 2018. That could soon change, under a tentative deal struck between lawmakers in early fall.

If legislative efforts are successful, the Buckeye State would enter the fold alongside neighbors Michigan, Indiana, West Virginia, and Pennsylvania. Kentucky to the south will have to wait until 2021 to resume its efforts.

Ohio’s Republican-controlled legislature this year considered two competing measures introduced in 2019 in the House and Senate. The passage of a final bill, if a full consensus can be brokered, would make the state — with its sizable population and large number of professional sports franchises, plus Ohio State University — extremely attractive to sports betting operators.

Future for legal Ohio sports betting

Here’s a rundown on how that might happen in both chambers of Ohio’s legislature, then ultimately what reaches the desk of Gov. Mike DeWine (R). In 2018, DeWine indicated that legalizing sports betting was on his legislative radar.

The bill that cleared the House

HB 194 has received much more attention than its Senate counterpart, as the House Finance Committee held nine different hearings on it since its introduction. On May 29, 2020, the measure passed on the full House floor by a 83-10 vote.

Despite its widespread approval in the House, the bill in its then current form was basically dead on arrival in the Senate.

Among other key aspects, the House bill would have:

  • Placed sports betting under regulatory control of the Ohio Lottery Commission.
  • Allowed retail sports wagers at the state’s four casinos and seven racetracks and at kiosks set up in veterans clubs and fraternal halls around the state.
  • Provided for online/mobile sports betting, the wagering format that has come to dominate the industry where permitted.
  • Permitted wide-ranging betting on professional and collegiate sports, including Ohio’s college teams.
  • Set a tax rate of 10% on sports betting revenue, with the funds devoted to lottery-supported educational programs.

The measure is primarily the handiwork of Republican state Rep. Dave Greenspan, supported by Democratic co-sponsor Brigid Kelly. The legislation’s biggest difference from what has passed in many states is the provision allowing bets at licensed social clubs. Greenspan said he would like to see the groups such as the VFW allowed one betting terminal each.

“In every one of our cities, big or small, there is a veteran hall or [fraternal club]  really close by, and specifically, you have to be a member to place a bet,” he said of the proposal.

Ultimately, Greenspan was willing to scrap plans for terminals (basically kiosks) all over the state, under a compromise with the Senate sponsors.

The Senate counterpart

Sen. John Eklund, also a Republican, sponsored SB 111, which is pending in the Senate General Government and Agency Review Committee.

Previously, Eklund and Greenspan had said there was an overlap in probably 90% of the provisions in their bills, which is part of the reason both have long been optimistic something will pass this session. Among the similarities, SB 111 also allows the sportsbook industry’s highly coveted online/mobile sports wagering in addition to all collegiate as well as professional sports betting. The lack of a “college carve-out” would be a great asset to sportsbooks in terms of action they could thus generate on Ohio State Buckeyes contests, in particular.

As in other states, Ohio’s colleges and universities have banded together to seek a prohibition on wagering on their contests, but state lawmakers are not looking to oblige the schools on that front.

Among some key points where the introduced Senate bill differed from the House version:

  • Regulation would fall under the existing Ohio Casino Control Commission.
  • Retail bets could be placed only at the state’s four casinos and seven racinos.
  • The tax rate would be set at 6.25%, lower than in the House proposal and even lower than the Nevada 6.75% rate that the gaming industry has long embraced as a gold standard.
  • Revenue from taxes would go into Ohio’s general fund, rather than be dedicated to education.

Of the notion to put sports betting kiosks in clubs, which could bolster their revenue, Eklund called it “well-intentioned,” but said, “I don’t think putting this activity in those venues would have the effect that people would like to see happen. I don’t think it’s a purposeful approach, number one. Number two, you’ve got some very potentially serious security issues with that in real sports gaming.”

What happens now after tentative deal reached

August was a crucial month for Ohio’s sports betting talks. Eklund and Greenspan, among other key policymakers and stakeholders, continued a dialogue behind the scenes and have now reconciled their measures in advance of their chambers considering a new draft bill.

The draft bill hasn’t been made public yet, but what we do know is favorable to the industry.

As with most pieces of major legislation, a compromise bill at this stage would mean a conference committee ironing out differences between competing versions once the House and Senate have both acted. The key lawmakers involved would then hash out a version acceptable to both chambers, which could be voted upon and sent to Gov. Mike DeWine for his signature.

That is exactly what Greenspan anticipates will occur this year.

“It’s safe to say when these bills go through conference committee, we’ll come up with a [final] resolution there,” the House sponsor said. “I’ve always believed that from whenever the governor signs the bill, it would take four to six months for sports betting to take place.”

Main sticking point resolved and skins settled on

It has been agreed that the Ohio Casino Control Commission should be the regulator, which is a win for the commercial sports gambling industry. The OCCC has regulated casino gambling in Ohio since 2012, so it has plenty of experience.

Previously, Greenspan had referred to an opinion from the Legislative Service Commission (LSC) that he interpreted to mean that sports betting can only be regulated by the Ohio Lottery. The Senate disagreed, and now Greenspan is on board with Eklund.

It has also been agreed upon that Ohio’s four casinos and seven racinos will get three sports betting skins apiece, which good for the industry. In Indiana, for example, casinos also get three online/mobile skins. It’s not yet clear if Ohio will mandate that the properties use all their skins.

As for the tax rate, it’s looking like it will fall somewhere in the middle of the House and Senate proposals, likely around 8% (which Michigan has). A tax rate under 10% would make Ohio one of the cheapest states for a sportsbook to operate in. It’s not clear what the licensing fees will be, though.

It’s also not looking like Ohio would go with an in-person mobile registration requirement, another industry win.

Ohio’s land-based casinos and future online sportsbooks

Ohio is likely to take the approach of offering legal sports betting by tying (or tethering) online and mobile sports betting platforms to land-based casinos, similar to what is being done in Indiana and Pennsylvania. With that being the likely path, let’s take a look at the current casino operators in the Buckeye State.

Ohio is home to a handful of casino venues, two of which of run by Penn National Gaming.

  • Hollywood Casino Columbus (Penn National Gaming): Located in Columbus, Ohio, Hollywood Casino Columbus offers more than 2,000 slots, 60 table games, and three dozen tables of live poker.
  • Hollywood Casino Toledo (Penn National Gaming): As you could’ve guessed, Hollywood Casino Toledo is located in Toledo, Ohio. The venue features 2,000 slots, nearly 60 table tables, and almost 20 live poker tables.
  • Hard Rock Cincinnati (Hard Rock International): Formerly JACK Casino Cincinnati, this venue will be rebranded to Hard Rock Cincinnati. It is located in Cincinnati, Ohio, and boasts 100,000 square feet of gaming space.
  • JACK Casino Cleveland (JACK Entertainment): Formerly Horseshoe Cleveland, JACK Casino Cleveland is located in Cleveland, Ohio, and has 100,000 square feet of gaming space, including more than 1,600 slots and more than 100 table games.

Similar to what we might see in Michigan, where Penn National Gaming operates Greektown Casino Hotel, we very well could see the company launch a regulated sports betting platform in Ohio once able to do so. As stakeholders in Barstool Sports and a foot in the door in the U.S. sports betting market, Ohio is another state where we could see Penn National Gaming become a big player.

In addition to the state’s land-based casinos, Ohio is home to several racinos (race track and casino combined). These properties allow for a few more operators to get in the mix, such as Boyd Gaming, MGM, and Eldorado.

  • Belterra Park Gaming & Entertainment Center (Boyd Gaming)
  • Hollywood Gaming at Dayton Raceway (Penn National Gaming)
  • Hollywood Gaming at Mahoning Valley Race Course (Penn National Gaming)
  • JACK Thistledown Racino (JACK Entertainment)
  • MGM Northfield Park (MGM Resorts)
  • Miami Valley Gaming (Churchill Downs/Delaware North)
  • Scioto Downs Racino (Eldorado Resorts)

MGM owns and operates MGM Northfield Park, a 200,000 square foot racino in Northfield, Ohio, that was formerly the Hard Rock Rocksino Northfield Park. The BetMGM online and mobile sports betting platform continues to grow throughout the U.S. and we can expect the brand to become available in Ohio was allowed.

Eldorado Resorts recently completed its acquisition of Caesars Entertainment. William Hill Sportsbook has an arrangement with Eldorado and seems likely to outfit a sportsbook at that property. However, Caesars has operational sports betting lounges and apps in other states, and may have priority for Eldorado in Ohio. In late September, it was revealed that the new Caesars was in talks to take over William Hill.

DraftKings and FanDuel in Ohio

Two of the biggest players on the legal U.S. sports betting scene are DraftKings and FanDuel. Both have operational daily fantasy sports (DFS) platforms in Ohio, thanks to HB 132 being signed into law in late 2017. But this doesn’t mean DraftKings and FanDuel can simply open up their sportsbooks in Ohio once the state gives sports betting the green light.

Having operational legal DFS platforms in Ohio can show that DraftKings and FanDuel are able to operate under the state’s regulatory guidelines to create safe and secure platforms, but the two operators will still need to partner with a land-based casino if they want to enter Ohio’s legal sports betting market when it becomes available. Entering into an agreement with a land-based license holder will be nothing new for DraftKings and FanDuel, though.

The two operators have experience taking this path in other states. For FanDuel, they will almost certainly be the online brand for the Boyd Gaming-owned Belterra Park Gaming & Entertainment Center, given the FanDuel-Boyd partnership in other jurisdctions. DraftKings is likely to pair up with Penn National Gaming for one of its properties.

Ohio’s gambling history

Ohio is generally known as a more conservative state than many of its neighbors, which could help explain why it has been slower to take advantage of the sports betting opportunity since the U.S. Supreme Court’s May 2018 decision striking down a federal prohibition against it (outside of Nevada).

The Buckeye State was later to the party, for instance, in allowing commercial casinos years after Michigan, Indiana, West Virginia, and Pennsylvania had already done so.

Prior to a statewide referendum approving casinos in 2009, the state only had its lottery and horsetrack racing, as voters had rejected casino proposals on multiple occasions previously. The four existing casinos opened in 2012-13 in the state’s major cities: Cleveland, Cincinnati, Columbus, and Toledo.

In 2011, a governor’s executive order granted the seven racetracks the right to add video slot terminals under regulation of the Lottery Commission. The racinos are not permitted to operate table games, but they collectively took in more than $1 billion in revenue from the slots in the last fiscal year.