Ohio Sports Betting Hearing Draws Detractors & Proponents

After the first hearing concerning SB 176 — Ohio’s new proposed sports betting legislation — last week lasted just 15 minutes, the second hearing before the Senate Select Committee on Gaming included far more testimony for and against.

The hearing on Wednesday lasted an hour and 50 minutes and included 16 live testimonies and six written testimonies.

The first hearing concluded after two state senators testified — joint sponsors Sen. Nathan Manning (R-District 13), vice-chair of the Ohio Senate Select Committee on Gaming, and Sen. Ninaj Artani (R-District 6). They also announced amendments to the bill.

Wednesday’s live testimony highlights included the Cincinnati Reds, the PGA’s Memorial Tournament (which will be held June 3-6 at Muirfield Village in Dublin), and the Haslam Sports Group, which represented the Cleveland Browns and the MLS’ Columbus Crew. Representatives from those groups said they want to get licenses under the legislation, along with the state’s 11 casinos and racinos.

“We are in talks with the operators who would be designated to operate under the license we are talking about and as they are trying to gain market share, the number of licenses that are in Ohio directly impacts their business model,” said Ted Tywang, vice president and general counsel of the Haslam Sports Group. “We’ve seen in other states that if there are too many licenses, there is market saturation, potential consumer confusion, but there is also a possibility that some of these licenses lay dormant.

“We think 20 skins is a great model to start. We do think it’s a conservative approach and that you can always grow. We feel strongly that the Casino Control Commission should have the authority to see how it goes and see how the market develops.”

Kevin Cochran, senior manager of government affairs and senior corporate counsel for DraftKings, provided testimony, praising the legislation’s vast sports betting menu, 10% tax rate, and ways to end offshore market usage.

“It sounds kind of crazy but we essentially have to make players break up with their bookies,” Cochran said. “And to do that, it’s offering them a promotion to get them to try the regulated product, or else they don’t have as much of an incentive to go to the regulated product.”

Cincinnati Reds Chief Financial Officer Doug Healey pushed for the Reds to get a brick-and-mortar sportsbook license.

“For us, it’s an economic development down on the riverfront. We would partner with a sportsbook operator who would select a location in our restaurant and bar district down on the banks,” Healey said. “I can tell you, all the businesses down there believe that as well. We also believe all the nine professional sports entities, along with the casinos and the racinos, should have the ability to create a retail presence.”

The next hearing is scheduled for May 26.

Legislation Amended
With last week’s subtle changes to the legislation, casinos can now apply for Class B sports betting licenses. The bill will maintain 20 Class A and 20 Class B licenses. A Type A license must have or create a substantial Ohio presence and then the holder would subcontract with as many online sports betting apps as they want.

When the bill was introduced on May 6, details included that a Class A license will be for a facility already in place — casinos and racetracks — where they can bank the bet. In turn, they then can partner with a sports betting platform for a mobile application, such as DraftKings or FanDuel. There are 11 facilities that currently can bank bets.

Class B will be for brick-and-mortar sportsbooks. A license would be $1 million for three years. Sports teams and their stadiums/arenas in Ohio can apply.

There will be a 10% tax on transactions, where revenue generated will be for public/private education and gambling addiction; gaming oversight will fall under the Ohio Casino Control Commission.

Lawmakers Want Bill Approved By End of June
Sen. Kirk Schuring (R-Canton), chairman of the Senate Select Committee on Gaming, two weeks ago laid out a 252-page plan for what he calls “a powerful bill that no one has seen before.”

The goal, according to lawmakers, is to have legislation on Gov. Mike DeWine’s desk by the end of June.

The Ohio legislature is in session until Dec. 31.