Cautious Optimism Projected for Ohio Sports Wagering Future

• Despite some legislative agreements, many key issues need to be addressed & decided
• Current disputes include “who” will regulate Ohio sports wagering plus tax rate % 
• Four states surrounding Ohio enjoying initial success may be catalyst for 2021 passage

Unfortunately, only a small amount of positivity is currently available involving the near future for legalized sports wagering in Ohio.

The issue of sports betting had been floated in the state legislature over the past year. Forecasts seemed to grow a bit brighter over the summer as state lawmakers worked cohesively on a sports betting bill.  Now that momentum has headed back into a standstill.

Last Wednesday the topic of sports wagering entered the Senate General Government and Agency Review Committee agenda, lasting perhaps ten minutes and netting little result. It was the third hearing on SB 111.

Representatives from six major operators and industry group iDEA Growth submitted their written testimony favoring legalization of statewide online sports wagering for Ohio ASAP. With only one person appearing at the hearing, Adam Suliman of Jack Entertainment, there was no formal vote.

Suliman said:

We are excited about the prospect of adding physical sportsbooks and related amenities at our properties here in Ohio. Although the sports wagering business is an incredibly low-margin business, we feel it is a crucial amenity. … Our customers tell me regularly that they are looking forward to a day in the near future when they can wager legally on their favorite sporting event.

All sides seem to agree that mobile sports wagering is necessary for Ohio along with a low tax rate. However, the legislators do not support any type of “royalty payment” for professional sports leagues.

Another issue to be discussed and will be debated is which specific government agency should regulate sports wagering. Also, what the tax rate will be and where funds generated from sports wagering will be dispersed.

The Senate favors the state’s Casino Control Commission regulating sports betting while the House favors the Ohio Lottery. Referring to the latest version of HB 194, it names the casino commission as a regulator and sets the tax rate at 8%, down from a proposed 10%.

Within this new bill, it states that operators with digital(mobile) platforms must be affixed to brick and mortar retail casino locations. Also, each location would be entitled to two mobile skins. The licensing and application fee would be $100,000 per operator, valid for a three-year potentially renewable period.

Major Support from Both Sides

It would seem likely that Ohio Sen. John Ekland, who has worked on these bills will have to re-work them to satisfy all sides going forward in early 2021. In his defense is ample evidence from four bordering states including Pennsylvania, Indiana, West Virginia, and Michigan (starting soon), that are all gaining significant benefit from legalizing sports wagering.

Several sports betting companies including Penn National Gaming, MGM (BetMGM), DraftKings Sportsbook, FanDuel, among others currently involved in these states are lined-up in support and have also provided testimony.

MGM Vice President of Government Affairs Rick Limardo wrote:

I commend the sponsors for their diligent work on reconciling the House and Senate sports betting drafts. The most recent version by the sponsors reflects feedback from all sides and is in line with many of the other successful sports betting regimes already implemented across the country, including the states surrounding Ohio.”

Limardo also wrote :

Ohio residents currently have convenient access to illegal, unregulated mobile sports wagering sites such as Bovada and others. However, they lack a legal, properly regulated alternative. Restricting a legal mobile market will not compel people into brick-and-mortar facilities or prevent them from wagering on sports; it will merely keep people on the existing black market.

Timeline for Ohio

As in the case involving many other US states, it is not a question of “if” sports wagering will be approved in Ohio but rather “when”. As debated issues are resolved it is extremely likely Ohio will approve sports betting with the certainty of mobile/online wagering being a necessary option. Once more priority issues involving COVID-19 hopefully clear their legislative hurdle, the likelihood of passing the bill will move up the agenda.