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What we’ve learned so far from Ohio’s new sports betting and online betting bill
Now that Ohio has (finally!) legalized sports betting and online betting, the state is on a path toward pairing casinos, racinos, professional teams, event centers, and more with online sportsbooks.
The road to legalizing these two types of betting has been long and windy for the Buckeye State. Here are eight Ohio sports betting bill takeaways that other states can take not of during their own path to legalizing sports betting and online betting.
Differences Between Ohio’s Sports Bill and Other States’
And while Ohio hit quite a few snags and delays in its long and winding road to legalization of sports betting and online betting, other states have also been hindered by issues passing such bills.
Since states are allowed to set their own laws regarding betting, each state has proposed its legislature in its own unique way. While Ohio’s issues may seem unique to the Buckeye State, other states have hit similar snafus.
Where Ohio differs from states such as Florida, New York, and Connecticut is that the current land-based casinos aren’t located on tribal nation land — as there are no tribal lands in Ohio.
Ohio also allowed for online sports betting in some form, as daily fantasy sports have been legal in the state for some time now.
To legally bet on fantasy sports in Ohio, you only need to be 18 years or older (not 21 years older.
You can even bet on fantasy sports online in Ohio, and some of the major online daily fantasy sports platforms also operate online sportsbooks, too.
Several of the major online sports betting platforms run daily fantasy sports and accept bets from Ohio residents, including DraftKings, FanDuel, and Yahoo! Sports.
It may be easier for Ohio to launch online sports betting, as the state has already been working with the major platforms that run online sports betting in other states.
Even though daily fantasy sports is very different from moneyline bets, introducing a version of “light” online sports betting to the state before the entire list of offerings may help the state’s launch go smoother.
Issues Slowing Down Ohio Sports Bill
There have been a few issues that slowed down the passing of Ohio’s online sports bill.
A few major issues have been COVID (many pieces of legislation, not just sports betting bills, have been shelved thanks to the pandemic), several key legislatures who were pushing for a sports bill were replaced in the 2020 election, and disagreements between sportsbooks, pari-mutuels, racinos, casinos, and other land-based organizations currently taking bets in Ohio.
Changing of the Guards in Ohio
One of the reasons the Ohio sports bill wasn’t able to pass until late 2021 was simply that there were other more pressing unforeseen issues — like COVID — to deal with. And sports betting simply took a backseat in 2020.
By the time the government could address the sports betting bill, the bill’s key lawmakers, Sen. John Eklund, House Rep. David Greenspan, and Sen. Sean O’Brien, were voted out of office.
This made it impossible for any bill to move forward, as lawmakers could not come to an agreement in the final month of 2020, effectively shelving House Bill H194 for the time being.
More Is Not Always Merrier
One of the main issues with all bills in favor of legalizing sports betting has been the number of skins (sports betting licenses) available for sportsbooks in the state.
How many skins should each sportsbook be able to snag? Which sportsbooks should get the first crack at skins? Should sportsbooks be able to apply for multiple skins at once? Or, should each sportsbook get the chance to apply for multiple skins the first go around?
This was an issue that delayed sports bills H194, SB176, and HB29 for about a year — first in December 2020 and then in June 2021.
Disagreements Between Sportsbooks (and Legislators)
Ohio sportsbooks also disagreed amongst themselves over who should be able to apply for sports betting skins (and the number of skins available).
The main issues were between pari-mutuel sportsbooks, racinos, casinos, pro teams, and sporting event centers. Again, most of the disagreements were regarding who should be able to apply for skins and how many skins each sportsbook should be able to apply for.
The second bill, SB176, included wording that sportsbooks could not be located at casinos or racinos in the state.
We’ve seen pushback in other states from pari-mutuel betting operators (hello, Florida). It may be worth other states taking note of these types of disagreements between sportsbooks — doing so could avoid future issues and setbacks.
Ohio’s Sports Betting Bill Lessons: What the Other States Can Learn
We’ve seen a lot of back-and-forth between state legislatures, sportsbooks, and the federal government as states have taken the arduous process of legalizing sports betting and online betting.
And while we don’t have a crystal ball to see into each state’s future of betting, there are a few things we do know in regards to passing this type of legislature going forward.
Not only does it take massive amounts of time to tune the finer points of these bills, but it also takes money and resources to do so.
It’s Gonna Take Time
There is a lot of money to be made in legalizing sports betting and online betting. So much so that many states have seen major pushback from organizations that may experience FOMO from bills.
And these organizations are willing to take legal action to get their fair share.
Legalizing sports betting and online betting can boost the income of pari-mutuels, casinos, professional sporting teams, event centers, and more. But it can also help boost the restaurant and bar industry — one industry that was hit hard by the pandemic.
When online betting and sports betting are legalized, more fans flock to live sporting events. But they also head to restaurants and bars to watch games. In Ohio, establishments with liquor permits will also be able to apply for a Type C license, which allows for self-service sports betting kiosks.
All of the nuts and bolts of these decisions take massive amounts of time to flesh out. The only thing we can seem to agree on is that there will be disagreements between sports betting and online betting providers.
It’s Gonna Take Money
The organizations interested in applying for a sports betting license will need to have plenty of cash to get operations up and running.
For larger partnerships, such as a professional sports team partnering with an online betting platform, such as DraftKings or FanDuel, would cost millions of dollars.
Anyone applying for a Type A license in Ohio will need to pay up $3 million for the first five years — and partner with an online platform. Second licenses will cost $10 million for the first five years. After the first five years, licenses will be $3 million each for the next five years.
The Ohio Casino Control Commission will get those fees. And we’re not even talking about taxable income, the cost of setting up an online platform, or the cost of operating self-service betting kiosks yet.
Sportsbooks Need to Show Economic Benefit
Before a sportsbook can apply for a skin (a first or second), it will need to prove that receiving a skin will benefit the Ohio economy.
The Ohio Casino Control Commission has stated that before a sportsbook can apply for a second skin, it will need to show "incremental economic benefit" to the state if the state should approve its license.
Sportsbooks will need to prove that receiving the second skin will benefit the state more than if the organization was simply awarded one skin. The sportsbook would also need to prove that receiving a second skin would be more beneficial to the state than if the state awarded the skin to another organization entirely.
Bet Types Are Limitless
The state already allowed pari-mutuel sportsbooks to accept bets. These bets were simply the outcome of more than one sporting event on one ticket (or the outcome of several horse racing events on one ticket in the case of racinos).
Now, Ohioans will be able to place different types of bets on different types of events.
Prop bets will be accepted throughout the state. These types of bets are practically unlimited. Not only will Ohioans be able to bet on the outcome of one event, but they’ll be able to bet on yards run, points scored by one player, number of home runs, and more.
This type of betting also expands into live betting, where gamblers may place bets on ever-changing scenarios once an event begins.
Ohioans will also be able to bet on eSports, professional video game competitions.
States Can Benefit From Tax Income
Obviously, one of the major benefits of legalizing sports betting and online betting is the taxable income collected by the state.
Though taxable income on sports betting and online betting varies by state, Ohio will receive 10% from sports betting.
Much of this type of taxed income ends up going to schools within the state. The state (just like other states) has also earmarked 2% of taxable income for programs for problem gambling. 0.5% of the license fees will go to the Sports Gaming Profits Veterans Fund, which will support veterans, their families, and veteran service commissions.