Now the real work begins.
On Thursday, the Ohio House passed an amended version of HB 194, a legal sports wagering bill that would allow for statewide mobile and retail wagering, 83-10. But the easy passage doesn’t mean that things will go as smoothly in the Senate.
While both chambers appear to support legal sports betting, there is a key issue that must be resolved before both sides agree to legalize — who will be the regulator?
Thursday, both House sponsors, Dave Greenspan and Brigid Kelly, spent considerable time in introducing HB 194 talking about how the only path to legal sports betting is to have the Ohio Lottery as the regulator. In his introduction of the bill on the House Floor, Greenspan referred to an opinion from the Legislative Service Commission (LSC) that he interprets to mean that sports betting can only be regulated by the Ohio Lottery, otherwise it would be illegal.
Senate wants casino commission to regulate
But the Senate clearly doesn’t agree, and SB 111, introduced last year by John Eklund, calls for the state’s Casino Control Commission to be the regulator.
Good news today on sports betting in Ohio but it’s not the bill we want. We want the senate bill. Do we really want the lottery commission running things or the casinos? I’ll take the folks who are doing it in other states. State senate needs to get a move on.
— The Torg (@TorgRadio) May 28, 2020
Eklund requested clarification on this issue last year, and the LSC wrote in a letter to him:
Therefore, if sports wagering is not a lottery conducted by a state agency, charitable bingo, or casino gaming, a court could hold that the General Assembly may not authorize it in Statute.
In addition, it’s unclear if the Ohio Constitution even permits sports betting. According to the text of the constitution, sports betting is not expressly prohibited, but it is also not specifically permitted under the definition of casino gaming.
(E) “Casino gaming” means any type of slot machine or table game wagering, using money, casino credit, or any representative of value, authorized in any of the states of Indiana, Michigan, Pennsylvania, and West Virginia as of January 1, 2009, and includes slot machine and table game wagering subsequently authorized by, but shall not be limited by, subsequent restrictions placed on such wagering in such states. “Casino gaming” does not include bingo, as authorized in Section 6 of Article XV, Ohio Constitution and conducted as of January 1, 2009, or horse racing where the pari-mutuel system of wagering is conducted, as authorized under the laws of this state as of January 1, 2009.
In this case, it’s all about how the definition of “lottery” is interpreted.
“If ‘lottery’ is construed narrowly (as to just traditional lottery games), then sports gambling is not constitutionally barred,” Steven Steinglass, who authored a book on the Ohio Constitution, told Cleveland.com.
Casino commission would allow more ‘dynamic’ climate
Whatever the ultimate interpretation, the House believes the Lottery should oversee sports betting, though Greenspan says his bill calls for the Ohio Casino Control Commission to enforce regulations. By sending a bill with the Lottery as the regulator to the Senate, it is taking the first step either toward hammering out the issue or opening a rift that could slow the legalization process. The issue has been brewing for several years.
Told my brother in Dayton that the Ohio House passed a sports betting bill. His response, "now do online poker."
— Brian Pempus (@brianpempus) May 28, 2020
“Ohio needs to come to terms between both chambers as to the best regulator to regulate sports betting that can create a dynamic market,” consultant Brendan Bussmann of Global Market Advisors told Sports Handle. “While they agree on 90% of structure, it comes down to where do they want the pulse of sports betting to be? With the lottery or with the casino commission?”
That’s a critical question. Since the Supreme Court overturned the Professional and Amateur Sports Protection Act in May 2018, 21 U.S. jurisdictions have legalized sports betting, though not all are up and running. Of that group, the states with sports betting run by lotteries have offered consumers fewer choices and less competition.
In fact, in Tennessee, where the lottery will be the regulator when sports betting goes live later this year, there is a “payout cap” that requires sportsbooks to hold a certain percentage of handle. In the real world, that means the odds won’t be as appealing as they would be without the cap.
Lottery-run states often give operators monopolies
And in Delaware, Montana, New Hampshire, Oregon, Rhode Island, and Washington D.C., (see immediately below) where sports betting is run by lotteries, one operator has a monopoly and consumers have only a single option for where to place bets.
New bettors in D.C. These odds (prices) are like paying $2 for a gallon of gas, while other states are only charging a $1.
You are unlikely to enjoy sports betting, at least for very long, paying these prices. h/t @TheRealMrACL. pic.twitter.com/KpOOIafRcf
— David Payne Purdum (@DavidPurdum) May 28, 2020
“My preference would be with the casino commission, they’ll be in a better position to create a dynamic market than the lottery, which is a risk-averse situation as we’ve seen in other states,” Bussmann said.
Once that issue is resolved, sports betting in Ohio would likely be considered by operators to be an attractive market — the current bills have reasonable tax rates (10% in the House, 6.25% in the Senate), remote registration and statewide mobile, retail wagering at casinos, horse racetracks, VFWs and other fraternal organizations, and no payouts to the professional sports leagues.
Ohio’s General Assembly meets year-round but will go on a summer hiatus in July and August, when the chambers won’t formally meet. As yet, HB 194 has not been assigned to a Senate committee for discussion, though other sports betting bills have gone through the General Government and Agency Review Committee.