Ohio sports betting is officially legal as the state’s General Assembly passed a bill on Wednesday. After three years of massive talks and debates on the topic, both the House and Senate voted to approve House Bill 29. Ohio Senate voted 31-1, and Ohio House voted 72-23, and hence, the bill is now in the hands of Governor Mike DeWine.
Ohioans Will Still Have to Wait At Least a Year
If Governor DeWine decides to sign the bill, state lawmakers think that it will take an additional year before residents in Ohio can place bets on sports. According to the bill, the state will start issuing licenses on April 1. Additional time to set up the regulatory system will be provided, but the deadline for the program to be completely set up is January 1, 2023.
Kirk Schuring, the lead negotiator, and Canton Republican stated that everyone was aware of the fact that illegal sports betting is taking place as the bill is being discussed. That is why the necessary regulatory provisions are being made with one goal in mind – make sure that betting in the state is done correctly.
According to an analysis by the Legislative Service Commission, sports betting has the potential to raise tens of millions of dollars annually, but only after the program is fully operational. This is no surprise, as sports betting has been expanding in the US at a very rapid rate. Not only that, but Ohio is no stranger to gambling of all types as its market recently set a yearly record.
Thousands of Licenses Are Set to Be Issued
With the bill, the 11 racinos and casinos in the state will be able to operate up to two online betting platforms and mobile apps, which are categorized as “skins.” The skins are valuable due to the fact that sports betting is mostly done online or on apps. The initial skin will come at the cost of $3 million, and the second one will be $10 million.
Sports teams and casinos won’t be able to receive the second skin unless they show a decent economic benefit from having it. These licenses will be known as Class A, and the state plans to hand out a total of 25.
Next, up, Ohio regulators will hand out 40 Class B licenses that will be offered to land-based operators. Depending on whether the business is licensed for online betting or not, the initial fee of these licenses will cost between $50,000 and $100,000.
Finally, all bars and restaurants that have a liquor license will be able to apply for a Class C license. The state plans to issue thousands of these permits.
As the state legislature researches estimate, sports betting will produce around $20 million in tax revenue annually, and licensing fee revenue from the first year could exceed $10 million. Once the market is fully developed, they believe that Ohioans will place $3.45 billion in sports bets each year.
That is why Schuring considers the bill an economic driver. It will help the state get the money from illegal betting rings back as well as from its residents who travel to its neighboring states to wager on sports.
The minimum legal age for placing sports bets will be 21 and licenses will be distributed in the state according to population. Net revenue will come at a 10% tax and the money that the state collects will mainly go to public and private K-12 education, with approximately 2% going to problem gambling services. Veterans’ services will receive around 0.5% of the license fees.
The Industry Will be Regulated by the Ohio Casino Control Commission
Sports betting activities in the state will be overseen by the Ohio Casino Control Commission. A compromise version of HB29 was approved on Wednesday by a conference committee of members of the House and Senate. Some last-minute “repairs” were made and they were targeted at smaller properties that could provide sports betting services. Some of these tweaks included lower licensing fees and tax-exempt betting receipts.
Moreover, the cap on the number of online betting platforms was lowered and in doing so, the commission gained discretion of awarding more online licenses to worthy applicants.
Starting in 2027, operators could have a 10% tax write-off on issued promotional gambling credits and the percentage will rise to 20% in 2031.
The new sports betting deal comes after countless hours of debate and Ohio will finally be able to join Michigan, Pennsylvania, West Virginia, and Indiana (its neighboring states) as regions where sports betting is legal. Kentucky still has an ongoing debate on this issue.