Ohio Still Has Plenty Of Opponents For Online Gaming - iGaming Post

The recent legislative hearing in Ohio concerning the proposed online casino gaming bill has underscored the manifold challenges this initiative faces on its journey to approval. With numerous stakeholders articulating their concerns, the momentum for legalizing online gaming in Ohio is fraught with uncertainty.

During an extensive three-hour session, over 40 individuals provided testimony on Senate Bill 197, which seeks to establish a comprehensive framework for online casino gaming in the state. The reactions were telling: a significant majority expressed opposition or sought considerable amendments to the bill, while only two representatives from the online gaming sector—Fanatics and Rush Street Interactive—showed support, albeit with requests for changes to the legislation.

Key Concerns Raised During the Hearing

The hearing illuminated various apprehensions from a wide array of sectors:

High Fees and Taxes: Stakeholders criticized the proposed licensing fees and tax rates, which rank among the highest nationally.
Impact on Local Businesses: Specific concerns were raised about the potential negative ramifications for brick-and-mortar establishments, especially local casinos and racinos.
Increased Risk of Problem Gambling: Several speakers, including representatives from religious and anti-gambling organizations, cautioned that online gaming could exacerbate existing gambling addiction issues.

Evolution of Gambling in Ohio

Over the past two decades, Ohio has gradually expanded its legal gambling landscape, currently hosting four commercial casinos and seven racinos that combine horse racing with gaming. Furthermore, Ohio has legalized online sports betting, aligning itself with neighboring Midwestern states like Michigan and Pennsylvania.

Competitive Landscape: Comparing States

As Ohio seeks to enter the online casino gaming arena, it faces fierce competition from states with established markets:

Michigan, Pennsylvania, and West Virginia: These states have successfully implemented robust online casino gaming frameworks.
Smaller Markets: States such as Delaware, Connecticut, and Rhode Island have also legalized real-money online casino games, but their markets are considerably more limited.

The political climate concerning online slots and table games remains contentious, with many lawmakers wary of endorsing such measures due to concerns about potential gambling-related issues.

Overview of Senate Bill 197

Senate Bill 197 aims to authorize up to 11 online casino licenses, each necessitating a partnership with an existing Ohio casino or racino. The legislative proposal includes:

License Fees: A staggering $50 million—setting the bar as the highest in the United States.
Tax Rates: A tax structure on gross iGaming revenue ranging from 36% to 40%, contingent upon the relationship between the online operator and physical gaming venues.

Implications of the Proposed Legislation for Operators

The financial ramifications of the bill are pivotal in discussions among potential operators. For example, a casino such as Caesars, which has established operations in Ohio, could benefit from a lower tax rate by utilizing its own iGaming platform. Conversely, an out-of-state operator like FanDuel would be subjected to the higher tax rate due to its lack of a local footprint.

Support and Opposition

Advocates for the Bill

Prominent industry players, including FanDuel, DraftKings, and BetMGM, have shown support for the bill while advocating for a more business-friendly regulatory environment. Brandt Iden from Fanatics has called for lower fees and tax rates, suggesting an increase in potential licenses from 11 to 22 to stimulate healthy competition.

Detractors of the Bill

On the other hand, Miami Valley Gaming, which operates a racino in Ohio, staunchly opposes the bill, arguing that it would threaten existing jobs and revenue streams. This perspective is echoed by smaller, local casino operators, who express fears about the disruptive impact of online gaming on their businesses.

Conclusion

As Ohio navigates the complexities of legalizing online casino gaming, the discourse among stakeholders reflects a diverse array of perspectives. Balancing the interests of established gaming operations with the potential benefits of a robust online market will be crucial in shaping the future of gambling in the state. The ongoing developments surrounding Senate Bill 197 will be pivotal in determining Ohio’s trajectory in the gambling industry, highlighting the need for strategic engagement with all stakeholders involved.