Ohio Senate unveils legal sports-betting bill
May 7—COLUMBUS — A bipartisan bill unveiled Thursday would allow Ohio to award licenses for 40 sports-betting operations in the state ranging from bricks-and-mortar facilities to online and mobile betting apps.
It would allow the Ohio Lottery to offer sports pools through its sales agents, open the door for professional sports teams to run their own bookmaking operations, and legalize so-called "e-bingo" games at veterans' halls and fraternal organizations.
Senate Bill 176 would tax net revenue at 10 percent and potentially charge $1 million in fees for three-year licenses with 98 percent of proceeds going to private and public K-12 education and 2 percent going to problem gambling programs.
It would allow up to 20 new Type A licenses for online and mobile sports betting. Currently, there are 11 Type A licensees in Ohio—the Las Vegas-style casinos in Toledo, Cleveland, Columbus, and Cincinnati enshrined in the Ohio Constitution and seven racetrack slots parlors operated as extensions of the lottery.
But Sen. Kirk Schuring (R., Canton), who rolled out the plan, said these casinos and racinos are not guaranteed licenses for online operations and would have to compete with other entities, including possibly some from out of state, who want to establish some bookmaking entity in Ohio.
The licensees could partner with on-line mobile bookmaking operators like Draft Kings and Barstool.
No one person or parent company could hold more than five Type A licenses.
The 252-page bill allows for another 20 licenses for bricks-and-mortar sports-betting operations—such as sports bars or areas inside casinos and racinos complete with big-screen TVs where bets could be physically placed. Someone seeking both physical and online operations would need both Type A and B licenses.
This expansion into online and bricks-and-mortar sports gambling would be regulated under the Ohio Casino Control Commission while expansion of lottery offerings into sports pools would remain under the lottery commission.
Mr. Schuring said the $1 million licensing fees remain a matter of negotiation. He offered no estimates on how much money might be raised from taxes and licensing fees, but sports betting has never been expected to be a huge revenue generator for the state.
"There's not going to be any prescriptive language in the legislation that's going to give somebody special preference," Mr. Schuring said. He was accompanied by both Democratic and fellow Republican senators, including Senate President Matt Huffman (R., Lima), in unveiling the bill.
It came three years after the U.S. Supreme Court said states outside Nevada could authorize sports betting within their borders and after all but one of Ohio's neighbors have already done so.
It would also legalize electronic versions of charitable bingo already played at veterans' and fraternal organizations.
"To those who try to claim that this is another form of slot machines, we put provisions in the bill that would make sure that that would absolutely not be the case," Mr. Schuring said.
These machines would be overseen by the Ohio attorney general's office as current charitable games are.
It allows the Ohio Lottery to potentially expand its offerings to include sports pools at $20 a ticket but prohibits the commission or an agent from engaging in odds-making. A legislative analysis of the bill provides an example of 1,000 lottery customers each buying $20 tickets for a $20,000 pool to bet on the outcome of a game between the Cleveland Browns and Pittsburgh Steelers.
The lottery commission would keep a flat fee of $2 per ticket, leaving $18,000 to go back into the pool to be disbursed back to players based on which team won.
The bill leaves decisions on whether to legalize online lottery sales, or "ilottery," for another day by establishing a committee to study its potential effects. A report is due to the General Assembly by Jan. 1. Businesses currently serving as lottery sales agents have worried that they could be cut out of the loop if sales go online.
Mr. Schuring led a select Senate committee that held eight hearings over the last three months in advance of introducing this bill as casinos, racetracks, professional sports teams, bars, bowling alleys, convenience stores, and others all lobbied for a piece of the action.
The House is following its own path. The goal is to have a bill signed into law before lawmakers recess for the summer in June and take effect on Jan. 1. It is not expected to be rolled into the next two-year state budget which is also on roughly the same timeline for passage, Mr. Huffman said.
The owners of Ohio's four voter-approved casinos and seven legislatively authorized racinos lobbied for exclusive rights to legal sports betting both inside their physical facilities and through online betting partners known as "skins."
In addition to the betting tax, sports gaming operators would also pay the state's Commercial Activity Tax on its net receipts. Income tax would be withheld from winnings.
The Fair Gaming Coalition of Ohio — a group of bars, bowling alleys, and other businesses already offering Ohio Lottery tickets and Keno — had called for a hybrid approach in which they could be dealt into the game.
Roughly 11,000 businesses in the state sell lottery products, profits from which are earmarked for K-12 education. The businesses and schools have worried that any new legal gambling in Ohio that doesn't include lottery agents will siphon off money meant for them.
The business coalition on Thursday said it would reserve comment for now while it analyzes the bill.
The casinos argue they are uniquely situated to offer sports betting because of security systems they already have in place and their existing relationships with online sportsbook partners.
Penn National Gaming, Inc. also declined to comment on the bill for now. It owns the Hollywood Casinos in Toledo and Columbus and racinos in Dayton and the Mahoning Valley and holds a 35 percent stake in Barstool Sports. It has launched related apps in Michigan and Pennsylvania.
First Published May 6, 2021, 11:40am
