Ohio Legislature Weighs In on Sports Betting: An Update

July 1, 2021

Sports betting is on the horizon in Ohio with the state House of Representatives and Senate passing multiple bill iterations back and forth. Ohio won’t see anything come to fruition in the immediate future, but passing this year looks to be inevitable.

A 2018 U.S. Supreme Court decision allowed states to set up their own rules on sports betting. In the years since, nearly all of Ohio’s neighbors have, leaving Ohio trailing behind and potentially missing out on substantial state income.

House Bill 29 (“HB 29”) is the most up-to-date version and includes some aspects and updates from previous Senate Bill 176. The Senate made some important changes to HB 29, and that updated version passed the Ohio Senate by a 31-0 margin on June 24. It now must be approved by the House and Governor Mike DeWine. The House punted on legalizing sports betting before its June 30 summer break, but representatives have said it will be a top priority in the fall.

Larger Population Centers to get more Type B Licenses

The Senate’s June 24th changes seem to make sports betting more likely to pass the House this fall. The most notable is allowing counties with a population of 800,000 or more a maximum of five Type B licenses. In previous versions the largest counties in the state were limited to three brick-and-mortar sportsbooks, and major sports teams would’ve gotten first dibs, leaving casinos in a tough spot.

The license allocation system in HB 29 is unique. Of the 21 states, along with Washington, D.C., that have a fully operational sports betting industry, none base eligibility on county population or have precluded brick-and-mortar casinos from getting a retail license.

The population limits were substantial issues in Cuyahoga and Hamilton counties, and potentially Franklin County. Cuyahoga County houses three major professional sports teams with the Browns, Cavaliers, and Indians, plus the JACK Cleveland casino and JACK Thistledown racino. Hamilton County faced similar issues with its own casino and racino, as well as the Cincinnati Bengals, Cincinnati Reds and FC Cincinnati.

An overview of HB 29 and it’s Potential Impact

Under the latest version of HB 29:

  • Ohio would offer up to 25 mobile licenses and up to 40 brick-and-mortar store licenses for sports gaming.
  • Counties with 800,000 or more residents would be eligible for five brick-and-mortar licenses; those with 400,000 to 800,000 residents would be eligible for three and those with at least 100,000 residents would be eligible for one.
  • Veterans and fraternal organizations could have up to ten electronic bingo or eBingo machines, which resemble slot machines. Organizations established before July 1 would be eligible for eBingo licenses.
  • Bars with certain liquor licenses could apply for a “Type C” sports gaming license to offer spreads and over/under bets on two kiosks. Application fees would be $2,000.
  • The 10% tax on sports gaming would be split 98% for public and private K12 education and 2% for problem gaming services. Half of the designated education money would be for extracurricular sports and activities.
  • Ohio would allow official league data to be part of proposition betting.
  • Ohio would allow wagers on competitive video games if participants are 18 or older.

The bill requires “Type A” online licensees to “maintain at least one place of business” in the state or also hold a “Type B” land-based license.  Online operators without a presence in the state would then apply for management service provider licenses that would enable them to act as sportsbook skins partnered with a Type A licensee. The 10% net revenue tax from sports gaming is estimated to bring in $17 million to $23 million starting in mid-2022.

The late addition to the bill allowing wagers on competitive games means new opportunities for esports betting in Ohio. Esports betting is one of the hottest trends, combining people’s love of video games and gambling. Esports popularity grows year-after-year, and the revenue generated from related domestic gambling alone will exceed $1 billion over the course of the next 3 years and could exceed $2 billion. Globally, esports gambling may reach $10 billion by 2025.  With gaming growing as a preferred past time worldwide, revenue opportunities related to esports betting do as well.