The Buckeye State is one of the most attractive potential legal sports betting markets in the country thanks to its population, voracious sports fans, and the number of pro sports and collegiate athletic teams.
Ohio’s market potential is similar to Pennsylvania’s, though the Keystone State enacted a 36% effective tax rate that is unfavorable to the industry. With about 11.7 million people, Ohio is among the top 10 most populous states.
Ohio sports fans and sports bettors are eager to see lawmakers and the governor bring legal sports wagering across the finish line. Already 20 states have either expressly authorized or allowed some form of legal wagering after the fall of the Professional and Amateur Sports Protection Act of 1992. In this page we discuss how Ohio may join the ranks of legalized states, and according to what framework.
Ohio sports betting legislative proposals
As of late April 2020, Ohio sports betting efforts were still a work in progress with no official breakthrough in sight.
Ohio casinos are technically allowed to offer any form of gaming authorized in either Indiana, Michigan, Pennsylvania, or West Virginia. So it appears that the casinos may be able to offer retail sports wagering, made possible by the U.S. Supreme Court ruling in May 2018.
All of the aforementioned Ohio neighbors have legal sports betting. The problem for Ohio is that the state has an astronomical 33% tax rate on casino revenue, which is basically a non-starter for retail sports betting operations. Books typically hold only 5-8% of the betting handle in the form of revenue. Ohio needs online/mobile sportsbooks and a lower tax rate to have a functional sports wagering industry. A new law is needed for that activity. This was the situation in Michigan, as the Detroit casinos could have kicked off retail sports betting as far back as 2018, but with a roughly 20% tax rate and no online/mobile, it just didn’t make business sense for the properties.
Bills on the table
Ohio lawmakers began the conversation with a pair of bills in 2019, Senate Bill No. 111 and House Bill No. 194. There was some optimism that legislation could clear both chambers in 2020 and reach Gov. Mike DeWine’s desk, but the COVID-19 public health crisis threw a massive wrench in those hopes. Still, with the state looking to generate new revenues, sports betting legalization could be front and center for debate when the legislature returns to Columbus.
The bills still diverge greatly, as SB 111 calls for the Ohio Casino Control Commission (OCCC) to regulate, while HB 194 would put the Ohio Lottery Commission (OLC) in charge. It’s a massive discrepancy, as a lottery-run market could permit sports wagering at hundreds of lottery retailers across the state.
The good news is that both bills call for online/mobile sport betting.
SB 111 calls for a 6.25% tax rate on the industry, while HB 194 has a 10% proposed rate. Even if the rate falls somewhere in between, Ohio would have an industry-friendly rate.
One problem, however, is that Ohio colleges and universities have sought to exclude their sports from legal wagering. That’s not a big deal in New Jersey, where Rutgers doesn’t quite move the needle at sportsbooks, but it would be a massive blow to Ohio books. That’s expected to be a major topic of debate when public discussions resume.
In the meantime, Ohioans are driving to other states to bet or using offshore and unregulated gambling sites.
Gaming facilities in Ohio
Reading the tea leaves, it appears unlikely that Ohio would allow stand-alone sports wagering apps, as any online/mobile sportsbook would likely be tethered to a brick-and-mortar casino or racino. While the legislation isn’t hashed out, it appears more likely Ohio would ultimately follow a regulatory structure similar to that of neighboring Indiana and Pennsylvania, rather than a market like casino-less Tennessee.
The Volunteer State has had a slew of problems with its lottery crafting regulations.
It appears that a legal Ohio market will more closely resemble what’s in SB 111 than what’s in HB 194.
As mentioned, Ohio imposes a 33% tax on casino gross gaming win, while the racinos pay 33.5% on their winnings from their electronic gaming machines.
The casino tax is used primarily to support county governments, with about half of the state’s tax revenue going to those municipalities. About a third goes to education, while 5% goes to host cities. Leftover monies are used for problem gambling services and administrative expenses.
All of the racino tax revenue goes to education.
Below is a list of all the retail gaming facilities and their respective operators.
- Hollywood Casino Columbus (Penn National Gaming)
- Hollywood Casino Toledo (Penn National Gaming)
- JACK Casino Cincinnati (Hard Rock International)
- JACK Casino Cleveland (JACK Entertainment)
- Belterra Park Gaming & Entertainment Center (Boyd Gaming)
- Hollywood Gaming at Dayton Raceway (Penn National Gaming)
- Hollywood Gaming at Mahoning Valley Race Course (Penn National Gaming)
- JACK Thistledown Racino (JACK Entertainment)
- MGM Northfield Park (MGM Resorts)
- Miami Valley Gaming (Churchill Downs/Delaware North)
- Scioto Downs Racino (Eldorado Resorts)
Ohio casino history
The Buckeye State is a relative newcomer to the casino industry, having only had retail casino gambling since 2012. Ohio voters approved a ballot initiative in 2009 to allow for casinos in four of its major cities. Ohio was part of the regional casino boom that occurred in the aftermath of the Great Recession, which temporarily greatly damaged gaming revenue in Las Vegas. Tourism was hit hard, so the industry lobbied to put casinos across the country.
Casino gambling also allowed states to raise revenues without raising taxes on residents, and Ohio, along with many other states, went that route.
Under Ohio law, the four casinos are regulated by the OCCC, while the racinos are under OLC oversight.
The racinos don’t have live dealer table games, which is the main difference between the facilities.
The first casino to open was Hollywood Casino Toledo in 2012, followed by the other three casinos in the spring of 2013. The first racino also opened in 2012.
The racinos were authorized under an executive order from the governor that allowed video lottery terminals at the racetracks. Ohio has had seven racinos since 2014, and under the legal landscape there isn’t a cap on the number of racinos. There is a cap of four Las Vegas-style casinos.
Sports wagering would not need to be authorized under another ballot question.