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Ohio Sports Betting Begins to Take Shape With Compromise Bill

Ohio Sports Betting Begins to Take Shape With Compromise Bill article feature image

Ryan Young/Getty Images. Pictured: Brutus the Buckeye

Ohio could allow as many as 40 total online and retail sportsbooks if preliminary sports betting legislation introduced last week passes into law.

The long-awaited initial bill would permit up to 20 statewide mobile licenses and 20 retail licenses. As drafted currently, it would also create the nation’s first set-price, lottery-run sports betting pool market.

The wide-ranging bill will likely see extensive changes, beginning with a stakeholder hearing later this week.

Ohio has considered sports betting legislation for several years, including an unsuccessful 2020 push that passed the House of Representatives but fell in the Senate. Backers hope the latest sports betting proposal will assuage policymakers’ oversight, license allocation and other regulatory concerns.

“Gaming is already here but not legally,” said Sen. Kirk Schuring, one of the bill’s sponsors, in a press release last week. “My priority is to make sure this bill focuses on broad-based economic development, that provides no special privileges for any gaming business or organization. This is free market driven, and comes with oversight from existing Ohio agencies with gaming experience to make sure Ohioans are not being taken advantage of by illegal gaming.”

Ohio Sports Betting Bill Key Details

The bill is a compromise between state casinos and the lottery, which have battled for regulatory control and market access for years, dividing lawmakers and stalling legalization in the process. The bill would be one of the first in the country to give split control between private casinos and the government-run lottery and the first that allocates a specific bet type to just the lottery.

Online betting makes up 80 percent or more of handle in neighboring markets such as Pennsylvania and West Virginia and will realistically be the most lucrative aspect of the expansive sports betting bill. The state’s 11 casinos and hybrid racetrack “racinos” would all be eligible for one of the online licenses.

The casinos would be free to partner with an online sportsbook of their choice, but several casinos already have direct or natural sportsbook partnerships that would mean Caesars, BetMGM, TwinSpires and Barstool Sportsbook would all likely enter the market. As with most other heavily-populated states, DraftKings and FanDuel will almost assuredly also seek market access along with most if not all U.S. sports betting leaders.

This structure would also allow unaffiliated sportsbook operators to pursue licenses. This could make Ohio one of the few states allowing “untethered” market access and the first to do so with existing brick-and-mortar casinos.

The bill from Shuring and fellow Republican Senators Niraj Antani and Nathan Manning would also permit as many as 20 additional retail sportsbooks. This could allow bars, restaurants, fraternal organizations, bowling allies and other small businesses to open brick-and-mortar sportsbooks, a nod to these industries which lobbied for inclusion in the sports wagering legislation.

All 20 online and 20 retail sportsbooks would be under the purview of the Casino Control Commission. A three-year sportsbook license would cost $1 million, in line with similar fees in other states but could be a prohibitive price for most potentially eligible small businesses.

Additionally, the bill grants the Ohio Lottery access to $20 betting pools that Shuring said in a statement would operate like the traditional lottery games with winnings divided from losing wagers. These provisions would seem to appease lawmakers that pushed for lottery access to the Ohio sports betting market, a major sticking point during previous deliberations.

Net sports betting revenues would be taxed 10 percent. Revenue would be directed toward public and private education with two percent earmarked for addiction and problem gambling services.

“Sports gambling is already here, Ohio just isn’t benefiting from it,” Manning said in a statement announcing the proposal. “This bill is fair, no one gets a special benefit and the state has expert-level diverse oversight. It’s a win for taxpayers and the economy.”

Next Steps for Sports Betting in Ohio

Last week’s introduction comes after several months of hearings from a select sports betting committee that convened earlier this year. Lawmakers heard testimony from dozens of sportsbooks, local businesses, professional sports teams and other interested parties, which the bill’s sponsors said were all considered while crafting the legislation.

Another hearing is set for Wednesday, where many of the same groups are expected to give their thoughts on the initial draft.

With Republicans in the GOP-controlled Senate on board, supporters hope the bill will advance out of the committee stages of the legislative process and favorably onto the full floor. If passed, Senators would still need to work through any remaining differences in the House, a split that helped stall last year’s bill.

A 2020 sports betting bill that granted the lottery sports betting oversight easily passed the Ohio House with bipartisan support but was not taken up by the Senate, which preferred a separate casino commission-controlled proposal. Three of the bill’s four sponsors are not serving in the 2021 session, giving a potentially fresh start to this year’s follow-up measure.

The trio of Senate GOP sponsors are hoping this year’s more expansive bill can pass both houses and on to the desk of Republican Gov. Mike DeWine, who has called legal Ohio sports betting an “inevitability.” Getting to that point will require extensive negotiations, but Ohio’s most prominent sports betting supporters have begun this lengthy process with a proposal they believe can meet all stakeholders and policymakers’ demands for what could be one of the nation’s most lucrative legal wagering markets.

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