Another Update on Sports Betting in Ohio

Another Update on Sports Betting in Ohio

Last week, a substitute Senate Bill 176 was introduced, which made a litany of changes to Ohio’s proposed sports betting industry. And today, a few days after those changes were introduced, an omnibus amendment was passed to make even more changes to the bill, which was referred out of the Ohio Senate over to the House. Here is a summary of some of the most significant changes.

The Lottery is Out, but Bars and Restaurants are In

The sports gaming lottery pool has been removed from the bill. Instead, there will now be an unlimited number of Type C host licenses available to D liquor permit holders that wish to be licensed to host sports betting kiosks in their establishments. D liquor permit holders wishing to host sports betting kiosks must be licensed by the Casino Control Commission and pay a $6,000 license fee, which will be good for three years with a $6,000 fee due upon each renewal. Sports betting kiosks will be limited in the bets they can offer to moneyline, spread, and over/under bets, and no patron can bet more than $200 per day on a sports betting kiosk. There can also be no more than two kiosks in each licensed establishment. The kiosks must accept only credit and debit cards and payouts must be made back to the card.

Sports betting kiosks will be provided by Type C sports gaming proprietors (a nomenclature change from “gaming agent” made throughout the bill). No fewer than 3 and no more than 20 Type C proprietor licenses will be granted. Type C proprietor licenses will have an initial fee of $100,000 and a renewal fee of $25,000 every three years. Type C proprietors will be held to the same standards in respect to suitability, background checks, and financial proof as A and B licenses.

More Licenses, but Geographic Limits on Type B

The amount of available Type A licenses (online gaming) increases from 20 to 25. The amount of Type B licenses (brick and mortar) increases from 20 to 33. However, Type B licenses shall be allowed only in counties with populations greater than 100,000, per the 2010 census. The volume of licenses available in the county will be:

Population No. of Type B Licenses
Less than 100,000 0
100,000-500,000 1
500,000-1,000,000 2
1,000,000+ 3

Type B licenses will be available only to entities that can demonstrate significant economic activity in the county in which the license is to be operated. Type B licenses will be subject to an initial application fee of $100,000 with $25,000 renewal fees due every three years. Type A licenses will have an initial fee of $1,000,000 and the same is due upon renewal every three years.

Ohio Professional Teams Get Preference

Ohio professional teams (NBA/NFL/MLB/NHL/MLS) and facilities that host annual PGA Tour tournaments (i.e. Muirfield) and the promotor of a NASCAR race in the state (Mid-Ohio Sports Car Course) will all have preference for Type A and B Licenses. However, if a team leaves Ohio it automatically loses its licenses.

Additional Changes and Items of Note

Other changes include the creation of a definition for Mobile Management Service Provider for Type A licenses, the express inclusion of Esports as included in the definition of sporting events, and the elimination of the prohibition on wagering on events with participants younger than 18. With respect to the age prohibition, the logic is that some tennis matches and Olympic competitors may be younger than 18, so the Casino Control Commission will have discretion on whether to authorize wagering on those events. This also harmonizes the reporting threshold for back taxes and child support with the threshold found in the IRS code.

Timing

Ohio Senator Kirk Schuring, chair of the Senate Select Committee on Gaming, stated that the goal would be to pass the legislation no later than June 30. One of the changes to the bill was to eliminate the prohibition on wagering before January 1, 2022. However, that doesn’t mean wagering on sports will necessarily be allowed before then as the omnibus amendment instituted new requirements that the Casino Control Commission accept sports gaming proprietor licenses beginning on January 1, 2022, and begin issuing licenses no later than April 1, 2022. It would be safe to assume there will be no wagering before the first licenses are issued, so sports wagering may not be available in Ohio until April or May of 2022.

Now that the bill has passed the Senate, it’s onto the Ohio House and we will see what, if any, changes await it there.

This article was co-authored by Robert Dove, a gaming law attorney with Kegler Brown, and Mike Zatezalo, chair of the firm’s Gaming Law practice. Robert and Mike will continue to provide updates on this evolving legislation and are already partnering with established operators and emerging businesses on potential licensure, lobbying assistance and supply chain strategy as those businesses prepare to maximize their opportunities in anticipation of new sports betting opportunities in Ohio.

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