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Sports betting in Ohio takes one more step toward legalization

Money
Posted at 6:25 AM, Jun 18, 2021

The following article was originally published in the Ohio Capital Journal and published on News5Cleveland.com under a content-sharing agreement.

COLUMBUS, Ohio—This time next year, Ohioans could be placing sports bets on Cincinnati Reds games or choosing an underdog to win it all at the Memorial golf tournament in Dublin.

That’s if the Ohio House of Representatives quickly follows the lead of the state senate, whose members approved the framework for legalized sports betting earlier this week.

The near-unanimous vote put sports gambling in the Buckeye State one step closer to reality — at least, gambling in a localized and regulated way.

The Ohio Senate plan calls for three separate sportsbook licenses that would give Ohioans a chance to place bets online, at professional sports arenas and at a select few bars and restaurants.

  • There would be 25 Type A licenses for mobile betting available for sports franchises, casinos/racinos as well as major racing events and golf tournaments.
  • There would be 33 Type B licenses for brick and mortar sportsbooks in large-scale establishments. The pro sports teams would get first preference ahead of casinos/racinos. Type B licenses would only be approved in counties of at least 100,000 residents, with a max of three per county.
  • There would be unlimited Type C licenses for local bars and restaurants which hold liquor licenses for on-premise consumption. The businesses could have up to two betting kiosks offering limited sports betting game play. The kiosks would be credit/debit card use only, with a person limited to $200 in daily wagering.

Under this plan, the state would collect a 10% tax on net revenue, with nearly all of the proceeds going to K-12 education and the rest going to problem gambling services.

Only Ohioans 21 and older would be allowed to place bets.

Senate Bill 176 also legalizes e-bingo machines at veterans and fraternal halls. (Each location would be capped at 10 machines.) The bill creates a “study committee” to analyze iLottery, with a plan of considering lottery games on cell phones and computers at a future date.

“Let’s not be naïve, sports betting is happening in Ohio,” said Sen. Nathan Manning, R-North Ridgeville, an SB 176 sponsor. “It’s just not legal yet. It’s about time we do so.”

Democrats supported the sports betting legislation but expressed some concern about the limited number of Type B licenses they said could shut out casinos from offering sports books.

As noted above, the bill places a limit of three such licenses per county with preference given to sports franchises.

State Sen. Sandra Williams, D-Cleveland, said the Cuyahoga County licenses would likely go to the Cavaliers, Indians and Browns, therefore leaving JACK casino in downtown Cleveland without one. The casino could offer mobile betting, but no in-person betting within its actual casino.

The bill has also received criticism for cutting out small businesses such as gas stations and convenience stores.

An earlier proposal would have allowed such lottery retailers to sell $20 betting tickets. Senators took this away and made the businesses ineligible for offering sports betting.

Groups representing these businesses, including the Fair Gaming Coalition of Ohio and the Ohio Petroleum Markets & Convenience Store Association, want to see the House version restore this opportunity.

Senators are hoping the House version passes by a target date of June 30. With budget negotiations and other legislation still occupying much of lawmakers’ time, that may be a difficult hurdle to reach.

Any delays may push back the timeline for sports betting to be underway.

SB 176 sets Jan. 1, 2022 as the date when interested parties can apply for licenses. The Ohio Casino Control Commission would begin issuing them three months later, opening the door for legalized bets.

The mobile licenses (Type A), considered the most lucrative, would cost millions of dollars in fees to obtain and renew every three years.

The brick-and-mortar licenses at pro sports venues and casinos (Type B) would cost $100,000 to obtain and $25,000 to renew every three years.

It's expected these Type A and B license recipients would partner with existing sports book companies such as FanDuel or DraftKings.

The bars and restaurants seeking Type C licenses would pay a much smaller amount of $6,000 to host the betting kiosks.

Research from the Ohio Legislative Service Commission estimates all the legalized sports books combined would draw billions of dollars in bets each fiscal year. The taxable net revenue would amount to $19-24 million per year for K-12 education and hundreds of thousands of dollars for the Problem Sports Gaming Fund.

Sports betting is anticipated to be an economic development boon for the state coffers and local businesses alike, said state Sen. Niraj Antani, R-Miamisburg, another SB 176 sponsor.

But he also noted the thrill of the bet.

“If this bill brings a little bit more excitement to Ohioans watching a soccer game,” he said, “or a little bit more joy to fans watching a hockey game, then I think it’s worth it.”