Ohio Sports Betting Bill Tweaked as Slow Progress Continues (May 12)

Ohio lawmakers clarified that casinos could apply to open retail sportsbooks under an amended sports bill agreed to by a state gaming committee Wednesday, the latest tweak in the legislation’s slow and steady progress toward legalization.

Lawmakers took little further action Wednesday on the much-discussed bill, which would create one of the nation’s largest online and retail wagering markets and continue legal sports betting’s spread across the Midwest; Ohio neighbors Pennsylvania, West Virginia, Indiana and Michigan all already allow statewide mobile wagering.

Online Sports Betting Details

If signed into law, all 11 casino and hybrid horse track “racinos” would be eligible to apply for an online license, which makes up the vast majority of betting handle in mature markets. Existing Ohio casino operator or sportsbook partners such as BetMGM, Caesars, TwinSpires and Penn National’s Barstool Sportsbook would all be likely market entrants. These casinos, or others, could also partner with other leading national brands such as DraftKings, FanDuel and PointsBet.

Each of the 20 online license holders can also contract out with an unlimited number of additional sportsbook partners. This could create one of the first uncapped online markets in the country and the first with retail betting options.

The bill also allows other non-gaming entities to earn one of the online licenses as long as they have or can create a “substantial presence” in Ohio. Republican Sen. Nathan Manning, one of the bill’s three GOP cosponsors, said as an example Wednesday that Ford Motor Company could theoretically apply for an online sports betting license under this bill.

It remains to be seen which entities will apply, or ultimately be eligible to do so, but the bill’s proponents believe this will help spark controlled sports betting participation beyond the established brick-and-mortar gaming establishments.

“We want a free market but not the ‘wild, wild west’,” Manning said during Wednesday’s hearing.

Other Ohio Betting Options

The 11 casinos could earn retail sportsbook licenses to take bets under the amended bill as too could other, non-gaming entities. Far less lucrative than the statewide mobile licenses, the bill’s sponsors nevertheless pushed for the brick-and-mortar options to help small businesses, fraternal organizations and other entities, many of which lobbied for market access during sports betting hearings earlier this year.

License holders would be charged a $1 million fee renewable every three years. This fee isn’t substantial enough to discourage the 11 casinos from applying but could prove cost-prohibitive for smaller, less lucrative establishments.

Online and retail sports betting gaming revenues would be taxed 10 percent, the median national average.

Through both online and retail sportsbooks, eligible Ohio bettors could wager on Olympic events as well as in-state college programs, including the Ohio State football team. Industry analysts believe college wagering, and in-state betting in particular, can make up roughly 15 percent of total wagering handle.

The Casino Control Commission would oversee all the aforementioned sportsbooks. The bill directs the commission to choose the winning licensees for the 20 online and retail operators.

Lawmakers Wednesday added a requirement to the bill that commissioners consider regionality when selecting the winning license holders to assure winning operators were equitably distributed across the state. In the same committee hearing, they also striped a clause in the initial draft that granted licenses on a “first come, first serve” basis.

The House and Senate split last year over control for the CCC versus the state lottery, one of several political divides that helped tank 2020 sports betting efforts.

This year’s bill tries to bridge that gap with sports betting options for the Ohio Lottery. The lottery could offer $20 betting pools through its thousands of retailers, with winnings divided from losing wagers akin to the existing lottery games.

Ahead of and during Wednesday’s hearing, the bill’s sponsors stressed many of these clauses were subject to change.

Next Steps

Wednesday’s hearing continues the long sports betting legislative process that proponents have pushed for nearly three years. The more expansive 2021 compromise bill authored by the trio of Senate Republicans hopes to ameliorate lingers political differences, but it remains to be seen when or if lawmakers will come on board.

The bill seems to pacify many of the sportsbook operators, casinos, sports leagues, small businesses and other entities that lobbied for sports betting rights during two months of hearings earlier this year. Sports betting, in principle, already has bipartisan, bicameral support as well as backing from key stakeholders in the GOP-controlled legislature as well as Republican Gov. Mike DeWine.

Still, many of the same issues that thwarted sports betting in recent years remain in the statehouse.

Additionally, the bill’s expansive offerings could still exclude some interested parties from what is already a low-margin industry. But furthering market access in what is already shaping up as one of the nation’s least restrictive sports betting markets could divide revenues even further, especially for those not partnered with an established national sportsbook.

Ohio is among a handful of states with year-long legislative sessions, meaning lawmakers have more time to work through bills than most other states. It took lawmakers more than four months to introduce a first draft, and it could be a while longer until the amended version comes to a vote.