As the 2019 legislative session moves into full swing, Ohio has emerged as a likely candidate to become the latest state to legalize and regulate sports betting. Senate Bill 111 – which was introduced by state senators John Eklund (R-18) and Sean O’Brien (D-32) on March 18 – seeks to legalize Ohio sports betting throughout the Buckeye State.
If passed, Senate Bill 111 would authorize any of the 11 casinos and racetrack-based gaming venues (also known as “racinos”) to apply for a sportsbook operator’s license.
Prospective licensees – which would be permitted to form partnerships with approved sports betting operators – would then be required to pay an application fee of $100,000.
Wagering would be allowed via both brick and mortar and online / mobile sportsbooks, with the latter open only to bettors physically located within Ohio state lines.
Licensed operators would see gross gaming revenue taxed at a rate of 6.25 percent. That matches the sports betting tax levied by Nevada, but the Ohio sports betting industry would pay lower rates than those in New Jersey, where taxes of 8.5 percent on brick and mortar revenue and 13 percent for online wagering are in place.
The low rate should let Ohio compete directly with neighboring Pennsylvania – which launched legal sports betting in November of last year after passing legislation in late 2017 – given the Keystone State’s tax of 36 percent.
Last year, the Associated Press (AP) reported on how the FanDuel sportsbook in New Jersey counts nine percent of its player base as commuting from New York, while four percent of its customers reside in Pennsylvania. Fellow daily fantasy sports (DFS) operator turned Garden State sports betting kingpin DraftKings reported similar numbers, as 10 percent of the company’s New Jersey revenue is generated by out of state bettors.
Like other states which have successfully passed sports betting legislation, Ohio has declined to give professional leagues a cut of the action via so-called “integrity fees.”
Lieutenant Governor Jon Husted has gone on record as saying potential sports betting revenue should be used to help Ohio schools eliminate participation fees for sports, band, art, and other extracurricular activities.
Before securing election last November, Governor Mike DeWine told News 5 Cleveland that legal sports betting was essentially a foregone conclusion in Ohio:
“It’s coming to Ohio whether people want it or not. We need to be there to do it right, the right way.”
DeWine went on to explain that, while sports betting may not be his personal preference, he appreciates the industry’s ability to send valuable revenue into state coffers.
“I’m not a big fan of betting but it is a reality and Ohio voters have made that decision with the casinos and other things throughout the years and so it’s here.
I think it’s important for Ohio to do it right and so I will work with the state legislature when I’m governor to make sure this is done right, make sure that we can control it, make sure that we can regulate it.”
DeWine failed to include sports betting revenue in Ohio’s state budget – a move which preceded legalization in Rhode Island and Pennsylvania – but he doesn’t view that decision as a barrier to the SB-111’s eventual passage:
“Certainly, it is something the legislature is going to look at.
I would anticipate, candidly, that certainly within the life of this budget that it will take place in the legislature, and there will be funds in regard to that.
But we didn’t want to count on that. It’s not in place now.”