Gambling on sports is almost definitely on its way in Ohio, with two bipartisan bills in the legislature that will decide how it will be overseen by the state. But there’s also a debate over where sports betting will happen – in gambling facilities, at other venues, or even in people’s homes and pockets.
It’s been just over a year since the U.S. Supreme Court ruled states can legalize sports gambling. But it was happening before that and since then.
“Some estimates put the illegal U.S. sports wagering market at upward of $100 billion annually,” said Ayesha Molino, senior vice president of federal government affairs with MGM Resorts International, which owns the Cleveland area racino now called MGM Northfield.
Molino said MGM handles a billion dollars in sports wagers each year across the country. And Molino told members of the House Finance Committee that it’s time for Ohio to join the seven states that have legalized it.
“This illegal market has capitalized on enormous consumer demand while offering no protections to consumers, athletes or sporting events, and providing no revenue to state taxpayers,” Molino said.
Casinos maintain that sports wagering is a low margin business and that they can even lose money, but that it brings people in, boosting revenue from video slots and table games, restaurants and other offerings.
Those who’ve studied gambling have different answers not just on whether Ohio should legalize sports wagering – but how.
“I believe, based on the 2009 constitutional amendment, that sports gambling is legal today in the state of Ohio in the four casinos,” said Rob Walgate with the conservative Ohio Roundtable, which opposes casino gambling.
“I don’t think the casinos are authorized to do it – I mean, they’re definitely not authorized under the statute and the constitutional amendment,” said Sen. Bill Coley (R-Liberty Township), who’s also the President of the National Council of Legislators from Gaming States.
While Walgate and Coley disagree on whether sports gambling is legal in Ohio right now, they agree that state lawmakers should make some rules for it.
A bill in the Senate would put sports betting with the Casino Control Commission, while a House bill would put it with the Lottery Commission. That’s important, because with the Senate bill, it would be in casinos and racinos only, while in the House bill it would be in those locations and fraternal and veterans’ organizations, and maybe someday expanded to lottery vendors such as bars, restaurants and even grocery stores.
Walgate sued the state in 2011 over the legality of racinos, but a court ruled his group didn’t have legal standing to sue. And he said there could be trouble for the state this time too.
“If they’re going to put it under the Lottery Commission, I think you may see some litigation rear its head from some bar owners, from some restaurant owners, from some bowling alley owners who say, ‘wait a minute, we want a piece of the action,’” said Walgate.
But more important to some is the opportunity for sports gambling online or via mobile devices, which is allowed in nine states. Ohio lawmakers have been meeting with players in that space, including Jeff Ifrah, the founder of the online gaming trade association iDEA Growth.
“When regulators or legislators pass sports betting with an intent on raising a certain amount of revenue, they really don’t fully understand that if they don’t offer mobile, it’s very unlikely they’re going to achieve their revenue goals,” said Ifrah.
Rep. Dave Greenspan (R-Westlake) is a sponsor of the House bill, which he said will now spell out that sports gambling online will be allowed.
“Ohio is often criticized as being a laggard in adopting new and emerging issues or addressing issues. We are actually on the forefront of this,” said Greenspan.
But Walgate said he thinks online sports gambling is dangerous – especially when it comes to paying for it.
“I don’t know if the government can set a parameter legally that says you can only accept these types of transactions when it comes to cash. The business can set forth that. But does the government have the authority to tell business what forms of payment they can and cannot accept?” said Walgate.
The Ohio Lottery allows credit cards for all its games, but there is a daily limit of $100 per card. By contrast, most states don’t allow customers to use credit cards at casino games, but they can use ATMs inside casinos for cash advances. This House bill does say that only people over 21 would be able to legally bet on sports, though lottery games can be played by people over 18.
The bill would also include a 10 percent state tax after winners and federal taxes are paid, and as with other Ohio Lottery games, profits would go to education. Sen. Bill Coley estimates that could be more than a billion dollars a year - doubling what the lottery now raises for schools.