Sports Betting in Ohio is “Inevitable”

In the spring of this year, Ohio Governor Mike DeWine called the possibility of legalized sports betting in Ohio “inevitable”. It has been over nine months since DeWine made that statement and now it appears to be coming to fruition. It was reported earlier this week that legislators had reached an agreement on the practice, and yesterday it became official.

On Wednesday, both the Ohio Senate and House of Representatives voted to pass a bill that would legalize sports betting by the end of next year. House Bill 29 passed by a wide margin and had bipartisan support in both the House and Senate. The bill had enough support to be considered “veto-proof.” Now, the bill heads to Gov. DeWine’s desk for approval. The Ohio Governor has 90 days to pass the bill.

The bill itself would allow stadiums, casinos, and many other vendors to offer sports betting to customers. It also would include a tax on sports gambling that would go to funding key programs within Ohio. Surrounding states have seen monthly revenues skyrocket as of late, so it is no surprise that Ohio lawmakers are eager to get in on the action.

What Took So Long?

The United States Supreme Court lifted the ban on sports betting back in 2018 and dozens of other states have already legalized the industry. In states bordering Ohio, such as Pennsylvania, Michigan, and others, sports betting has seen record numbers in revenue over the past year. Ohio is also home to a number of professional sports franchises and the Pro Football Hall of Fame. That has left many people wondering, why has it taken so long for Ohio to legalize sports betting?

Ohio’s lack of legal sports betting is not the result of not trying. The legislators in Ohio’s House and Senate have been attempting to pass sports betting bills for years. Unfortunately, previous bills have not been able to garner enough support in both chambers to pass. Now, despite a sluggish start, it appears that the majority of lawmakers in both houses are ready to make legal sports betting in Ohio a reality.

That is not to say that every kink has been worked out. As Rob Walgate from the American Policy Roundtable points out, the current bill could violate Ohio’s constitution. An amendment to the state’s constitution in 2009 made it so players can only gamble at one of Ohio’s casinos or racinos. The current bill allows for sports betting to take place anywhere, not just at the brick-and-mortar operations. Lawmakers may need to pass a new amendment to the state’s constitution for the bill to have its desired effect.

Luckily, Ohio legislators have moved quickly over the last couple of months to get the sports betting bill passed. Adding a new amendment to Ohio’s constitution would be more challenging than passing a new bill, but legislators appear motivated to get in on the sports betting action, and the revenue that comes along with it.

What Will Sports Betting in Ohio Look Like?

If, more like when, the current sports betting bill is passed it will open the door for sportsbooks across the state. The proposed legislation will allow for stadiums, casinos, restaurants, and bars across Ohio to apply for a gambling license. The widespread availability of licenses would if all goes to plan, result in significant revenue for the state.

The revenue would be generated by a 10% tax on all gambling revenue in the state. Lawmakers plan to use the money generated by the tax on sportsbooks to fund veteran and education activities throughout the state. Ohio’s sports betting market may not reach the heights of some of the biggest gambling states, like New Jersey, but even smaller states have seen monthly incomes in the 100s of millions. The additional income would go a long way in helping programs recover from the COVID-19 pandemic.

One aspect that would certainly help increase revenue would be adding mobile sports betting options. The mobile sports betting industry has exploded over the last few years. By allowing mobile sportsbooks to operate, Ohio legislators would greatly expand the sports betting customer base. The more people that can engage in sports betting, the more revenue the state will generate from its 10% gambling tax. The popularity of both professional and collegiate sports in the state makes it an attractive option for sportsbooks looking to expand into new states.

Conclusion

A new bill has passed through the Ohio legislator that would make Ohio the latest state to offer legalized sports betting. Currently, Ohio is one of only 19 states that have not yet made sports betting legal. With HB 29 now on Governor DeWine’s desk for approval, it is only a matter of time before the Buckeye State offers sports betting.

The bill could mark the end of years of negotiation within the state’s legislature. Several other bills have been proposed since 2018, but they have failed to gain enough support to pass through the chambers.

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Now, Governor DeWine has 90 days to sign the bill into law. DeWine could try to strike down the bill, but it received enough support in the House and Senate to be considered veto-proof.

There are still some issues to work out, such as potentially needing to amend Ohio’s constitution, but things are moving in the right direction. Once passed, the bill will allow for sports betting to start no later than the beginning of 2023. Ohio legislators have included a 10% tax on gambling revenue that would go toward funding the state’s educational and veteran activities. As the state continues to recover from the effects of the pandemic, the additional revenue from sports betting could go a long way in accelerating the process.

Ohio Grocers Association Wants to Be a Part of Ohio Sports Betting

Sportsbook
The Ohio Senate Select Committee on Gaming met for the third time on Wednesday, with statements from stakeholders who support the legalization of Ohio sports betting. But the hearing didn’t proceed without a surprise as the state’s groceries said that they want a piece of the Ohio sports betting pie – the supermarkets.

Lobbyist Joe Ewig, who spoke in behalf of Ohio Grocers Association, said that the members of his group want to be part of the action if the state legalizes Ohio sports betting.

According to Ewig, Ohio’s grocers are capable of taking sports bets. The supermarket trade association has roughly 500 members and last year, Ewig said that they sold more than 313 million lottery tickets.

Said Ewig:

“We recognize that in Ohio there are many different concepts and suggestions for how sports games should work and be structured. To that end, we are not here today to advocate the opening of a sports betting in every grocery store and setting up tables at our locations or on our islands. However, we ask you to consider making us part of the sports gaming system.

Sports Betting in Grocery Stores

Ewig wants the Ohio Lottery to create some kind of sports betting product that can be offered by the grocery stores. Ideally, Ewig said that sports betting can be done using the existing lottery terminals that are already in place and functioning in grocery stores and supermarkets.

This kind of model would work, per Ewig, because a large volume of customers enter supermarkets daily. According to Ewig, customers are often in these stores because these are considered “safe locations” by customer.

Other than Ewig’s group, the discussion focused on the main talking points of Ohio sports betting: the 8-10% tax rate, provision for three skins per casino, and how legalization of Ohio sports betting will protect state bettors from illegal offshore betting.

Ohio Sputters After Fast Start

Back in 2018, it looked like Ohio would be one of the first states to take advantage of the Supreme Court’s repeal of the 1992 Professional and Amateur Sports Protection Act. The then newly-elected Governor Mike DeWine indicated that he was open to the legalization of sports betting in the Buckeye State.

As legislators started the legalization process, Ohio sports betting met its first challenge when the Assembly and Senate passed two different bills. The Assembly wanted to put the Ohio State Lottery in charge of Ohio sports betting However, the Senate wanted to place the Ohio Casino Control Commission as Ohio sports betting regulator.

Despite the delay, observers felt that Ohio would be able to legalize sports betting in 2020. But COVID-19 came and derailed those plans. Now they are starting from the bottom again.

Ohio Sports Betting Bills Face Stalemate, While Neighboring States Advance

Ohio State FlagAs of Spring 2019, two sports betting bills have been sitting, unmoved, in Ohio legislature:

  • OH SB 111 resides in the state Senate and aims to have the Ohio Casino Control Commission in charge of regulating sports betting.
  • OH HB 194 is in the state House and if legalized would appoint the Ohio Lottery as the regulatory authority over sports betting.

While it’s clear that these two Ohio sports betting bills have been locked in stalemate for months, the path to get out of it is unclear. With the Super Bowl only weeks away, sports wagering’s peak season, it comes as a shock that there hasn’t been a bigger push to move these bills forward, given the sensitive timeline.

Sen. John Eklund gave this statement last month, regarding the status of the legislature to this issue:

“The heavy lifting in terms of educating members, gathering info, caucusing, I think in my opinion, we’re coming to the end of that line. I know it’s taking a long time, but that doesn’t mean nothing’s going on. We’re working very hard to get this just so.”

Comments from the Speaker of the Ohio House of Representatives, Larry Householder, however, seemed to indicate different views:

 “The Senate at this point seems pretty committed to keeping it with the casinos. So we’ll just have to figure it all out.”

Ohio Falls Behind Neighboring States

Since Eklund’s comments last month, Ohio’s northern neighbor, Michigan, officially legalized both retail and online sports wagering. Kentucky, Ohio’s southern neighbor, has also sent a sports betting bill to their House floor and the bill looks to be in prime position to be signed into law with the governor supporting the bill.

Ohio now sits in between three states with active mobile betting that does not require in-person registration. That means that residents who live near the borders of Pennsylvania, West Virginia, or Indiana can all hop over the state line, place their bets, and come back to Ohio. This issue will seemingly only be accelerated when Michigan launches its own sports wagering apps.

Meanwhile, OH HB 194 has had a total of eight hearings conducted in the House Finance Committee since being introduced and has yet to reach the House Floor. Similarly, OH SB 111 has had two hearings in the Senate committee of General Government and Agency Review with no luck of obtaining a full vote from the Senate.

What’s the Hold Up?

What the hold up is really coming down to a disagreement over which state agency should regulate betting on sports.

Senate President Larry Obhof and Gov. Mike DeWine said they’re in favor of making it legal in Ohio’s 11 casinos and racinos, so long as it’s overseen by the Ohio Casino Control Commission. It would levy a 6.25% tax, with proceeds going into the state’s general fund. The Senate bill has only received two hearings so far.

Householder supports putting the Ohio Lottery Commission in charge, which could grant permission to small businesses like bars and restaurants and fraternal organizations to have sports betting terminals. It calls for taxing betting receipts at 10%, dedicating the net proceeds for education and gambling-addiction programs. The House version got eight committee hearings, but hasn’t gotten a hearing since December, with Householder saying it wasn’t quite ready for a full vote.

Both the Senate and House versions would allow for mobile betting, with neither version raising much money for the state. Casino companies generally prefer that the Casino Control Commission regulate the industry, though they’re not too pressed about which bill gets passed.

 

Ohio Racinos Hit Record Numbers via Slot Machine Gaming

OhioThe seven racetrack casinos of Ohio have reported record revenues via slot machine gaming with the recent fiscal year.

The state of Ohio is home to seven racetrack casinos, known as racinos. These venues offer slot machine gaming and during the recent fiscal year, the venues were able to hit record revenues. While the racinos did quite well, the land-based casinos of the state were only able to see small gains during the first portion of 2018.

Recent Revenues

On Monday, the Ohio Lottery Commission released the recent figures, with the fiscal year ending on June 30th generating $987 million in revenues from slot machine gaming. The racinos saw a 6.1% increase in slot machine revenue earnings based on comparisons with the same time frame from 2017. Over the past few years, the slots of the racinos have done really well, seeing a steady growth in earnings, growing as much as 1/3 since the fiscal year of 2015.

Each of the racinos in the state reported a revenue gain based on year-over-year totals. The Hard Rock Rocksino was the leader in earnings, with a 6% increase, generating $246.5 million. The Scioto Downs took the second-place position, earning $163.8 million while the JACK Thistledown facility was able to earn $121.4 million.

Land-Based Casino Revenues

When the racino slot machine revenues were released, the Ohio Casino Control Commission also provided the data from the first half of 2018 within the four land-based casinos. A total of $420.5 million was earned via slot and table game play, which is a 2% increase from the same time frame last year. Three of the four venues were able to see gains while one was not so lucky. The JACK Cincinnati was the lowest earner, bringing in $100.7 million, which is flat compared to 2018. The biggest earner was the Penn National Gaming’s Hollywood Casino Columbus, which brought in $115 million.

The racinos were able to outperform the casinos when it came to June figures, with $87.4 million generated, which is much higher than the $78 million from June 2017. The casinos only brought in $67.1 million which is slightly higher than last year’s $64 million. Table revenues helped the land-based venues to earn more for the month, especially considering that the slot games were down year-over-year.

The racinos and casinos are may soon be able to offer more if sports betting comes into play in the future. Reportedly, the gaming operators of the state want to get in on the sports betting industry now that the United States Supreme Court has ruled that PASPA is no longer valid. The Governor of the state, John Kashich, has stated via his office that he is considering the possibility of allowing sports betting in the state.

No movement has been made as far as legislation is concerned, so it would still be some time before any activity would be able to take place. It has been suggested that if lawmakers decide to legalize the option but have the same high tax rate of 33% as seen via non-slot games, then operators may not be too keen on signing up for sports betting.

Only time will tell what the state will do, but for now, there are earnings to be made via the slot games of both land-based casinos and racinos. It will be interesting to see if the increase in earnings will continue to be the trend for the state or if the games will see a change in earnings in the coming months.