Sports betting made its way onto the Senate General Government and Agency Review Committee agenda in Ohio on Wednesday, but the third hearing on SB 111 netted little in terms of advancing the bill. Representatives from six major operators and industry group iDEA Growth submitted written testimony favoring the legalization of statewide mobile/online sports betting in Ohio sooner than later, but only one, Adam Suliman of Jack Entertainment, appeared in person at the hearing. There was no vote.
“We are excited about the prospect of adding physical sportsbooks and related amenities at our properties here in Ohio,” Suliman testified. “Although the sports wagering business is an incredibly low-margin business, we feel it’s a crucial amenity. … Our customers tell me regularly that they are looking forward to a day in the near future when they can wager legally on their favorite sporting event.”
The hearing was the third on legal sports betting by the committee. Lawmakers in both chambers favor statewide mobile sports betting and low tax rates and do not support a “royalty” payment of any sort to the professional leagues. Among the major holdups along the way has been a disagreement over what agency should regulate sports betting and the tax rate. The Senate favors the state’s Casino Control Commission and the House favors the Ohio Lottery, but the latest version of HB 194 names the casino commission as regulator and sets the tax rate at 8%, down from 10%.
According to the bill, operators with digital platforms must be tethered to brick-and-mortar casinos, and each retail location is entitled to two mobile skins, or platforms. A previous version of the bill allowed for three per location. The licensing and application fees are $100,000, and a license fee is valid for three years.
SB 111 remains in committee while HB 194 passed the House and was introduced in the Senate in June.
Operators supportive, but still want some changes
“I commend the sponsors for their diligent work on reconciling the House and Senate sports betting drafts,” wrote MGM Vice President of Government Affairs Rick Limardo. “The most recent version by the sponsors reflects feedback from all sides and is in line with many of the other successful sports betting regimes already implemented across the country, including the states surrounding Ohio.”
But that is neither here nor there if there are no votes and the bills don’t move forward in the next few weeks. Key sponsors in both the Senate and House won’t be back next year, so time is of the essence.
OHIO: Senate Committee to hold hearing on sports betting legislation on 11/18. Basis for the discussion will be current draft compromise bill, which could get amended into SB111. Sen. Eklund tells me he is 💯committed to get it done this year. This hearing could help. pic.twitter.com/1pTTspMntK
— John A Pappas (@yanni_dc) November 13, 2020
Operators had plenty to say, mostly through written testimony.
“We believe legal sports betting has the potential to provide a meaningful shot in the arm to Ohio’s gaming industry and to provide a new revenue stream to help fund important state programs and services,” wrote Penn National Senior Vice President, Public Affairs & Government Relations D. Eric Schippers.
Wrote MGM’s Limardo: “Ohio residents currently have convenient access to illegal, unregulated mobile sports wagering sites such as Bovada and others. However, they lack a legal, properly regulated alternative. Restricting a legal mobile market will not compel people into brick-and-mortar facilities or prevent them from wagering on sports; it will merely keep people on the existing black market.”
Penn National operates four casinos in Ohio and earlier this year partnered with Barstool Sports. Penn National launched the first Barstool Sportsbook app in Pennsylvania in September, with plans to launch in Michigan as soon as regulators allow — both states border Ohio, which is all but surrounded by states that allow statewide digital sports betting.
MGM also operates in Ohio border states Indiana and West Virginia, with plans to launch in Michigan and Pennsylvania.
Operators: No to data mandate, yes to betting on colleges
Some proponents focused on specific details of legal sports betting. Below is a look at some of the more relevant topics:
Official league data mandate: Schippers and Penn National oppose the official league data mandate, which has been heavily discussed in Ohio and is in place in multiple states. Such a mandate requires sportsbooks to purchase data to settle wagers directly from the professional leagues or their representatives. Sportsbook operators are concerned that mandates will give the pro leagues a monopoly on data, which then won’t be available at a competitive cost.
“Most, if not all, of the leagues have sold their data to the major suppliers like Sportradar and BetGenius whom the operators are compensating for the data feeds they provide our sportsbooks,” Schippers wrote. “In addition, many gaming operators, including Penn National, have signed commercial deals with the Leagues for specialized, proprietary in-game data — such as how fast a puck is traveling or who had the hardest slap shot — to grow interest in sports wagering. This proves that these deals can be reached privately and should not be Legislatively mandated.”
PGA Tour touts its contributions to Ohio charities when calling for an "official league data" mandate during #HB194 hearing. Claims sportsbooks will "cheat" customers if there's no official league data for in-game.
— Brian Pempus (@brianpempus) October 9, 2019
Determining types of wagers to accept: MGM’s Limardo wrote that “in some jurisdictions, there has been discussion of legislatively limiting the types of bets that may be offered.” He argues that operators are uniquely qualified to make those decisions without legislative guidance. In particular, he wrote, betting on college sports should be legal.
“Regulated gaming operators must be able to provide customers with the product that they want,” Limardo wrote. “There is no question that collegiate athletics is extremely popular and in-play wagering is increasingly so. If legal, regulated operators cannot provide these products, consumers will go where they can get them.”
It is legal to bet on college athletics — including in-state teams — in all of Ohio’s border states that allow sports betting, though college prop bets are prohibited in Indiana.
Lobbyist Scott Ward, who submitted testimony on behalf of DraftKings and FanDuel, echoed Limardo’s thoughts on allowing betting on college sports and took it a step further, asking Ohio lawmakers to consider allowing wagering on eSports legal and leaving room for the possibility of betting on awards shows.
Mobile skins: Ward also addressed the number of mobile skins that would be legal, which in the latest draft amendments has dropped to two.
“Operators that strive to offer consumers more choice, variety, and better pricing across their products keep users engaged,” Ward wrote. “We believe that our products offer a great user experience, but we also recognize that multiple operators offering an array of products and promotions grow the overall market. We also believe that competition and the convenience of mobile betting are necessary elements of providing an attractive alternative to the illegal sports betting market.”
