Ohio became one of over 30 states to legalize online sports betting in January 2023. The Buckeye State has since experienced a marked rise in mobile betting activity, with close to 20 online sportsbook brands currently operating in Ohio, including BetMGM, FanDuel, and DraftKings, which is set to launch in North Carolina next month, according to Yahoo Finance.
Last year, Ohio collected around $134 million in gaming tax from over $7.7 billion worth of sports wagers placed by Ohioans, with 97% of these bets made through mobile apps.
This resounding success in sports betting hasn’t gone unnoticed. There are a raft of speculations about the potential for expanding legal online gambling in Ohio into iGaming, sparking a debate among gaming operators, policymakers, and the general public.
In mid-February, a joint group of casinos, gaming lobbyists, and online casino operators made an ambitious case to a panel of state legislators that Ohio should consider legalizing iGaming. If lawmakers support their push, the move would allow Ohioans to play blackjack, video poker, slots, and other table games directly from their smartphones and tablets.
The Campaign for iGaming Legalization
Last summer, Ohio lawmakers included provisions in the state’s biennial budget to establish a study committee tasked with examining the state’s current landscape of lottery, casino, and sports betting. This committee’s mandate extends beyond mere observation, as they are charged with envisioning the future of the gambling industry in Ohio.
At a recent meeting held last month, a cohort of gaming lobbyists painted a vivid picture of this future, one dominated by the legalization of iGaming and mobile casino apps. Echoing the arguments that paved the way for the legalization of sports betting, the advocates contend that legalizing iGaming would help curb the thriving illegal online gambling operations.
Their sentiments reverberate, especially with state regulators who have repeatedly asked the federal government for help with tackling the black market for online gambling. More than that, the gaming lobbyists are urging legislators to consider legalizing iGaming because it will help perk up the state coffers with a new tax revenue stream.
Three major operators in Ohio have projected that the state could potentially bring in annual tax revenue in the $205-$410 million range through iGaming. Their estimate is derived from the average gaming revenue per adult in states like Michigan, Pennsylvania, and New Jersey, where online gambling has been legalized in recent years.
The potential tax revenue for Ohio is calculated based on tax rates varying from 10% to 20%, which would need to be determined by the state legislature. Ohio’s foray into legalized sports betting in 2023 ushered in a remarkable surge of wagering activity.
The state witnessed a staggering $7.7 billion in sports bets placed by residents, translating to player losses of $935 million. The inaugural year of sports betting yielded nearly $134 million in tax revenue for the state’s coffers, with the tax rate initially set at 10% before being doubled to 20% in the subsequent budget.
According to the lobbyists, industry projections suggest that legalizing iGaming could unlock an even more lucrative market. They argue that enabling online casino gaming would open the floodgates to a vastly larger audience, potentially eclipsing the revenue generated by the state’s burgeoning sports betting industry.
Major Operators at the Forefront of the iGaming Push
Leading the charge for iGaming legalization was Michelle MacGregor, representing a strong alliance of major sports betting operators, including BETMGM, DraftKings, Fanatics, and FanDuel. MacGregor’s presentation to lawmakers highlighted the potential revenue windfall.
His projections indicated that the five states – Delaware, New Jersey, Pennsylvania, West Virginia, and Michigan – with active iGaming programs generated a staggering $1.2 billion in tax revenue in 2023 alone. In comparison, the five states collected only $301 million from sports betting despite the entire industry posting a record $10.9 billion in revenue for the year, as per the figures seen by ESPN.
Representatives from other gaming operators joined the campaign for iGaming, each presenting their case for legalizing online casinos. Ryan Soultz, a lobbyist for Boyd Gaming Corp., which operates the Belterra Park racino in Cincinnati, articulated the sentiment shared by many in the industry.
Soultz asserted that Boyd and fellow operators consider iGaming a natural next step in expanding the gambling market in Ohio. He said they are confident that online casino gambling will help perk up their current brick-and-mortar operations, providing a chance to interact with their customers when they are not at their physical locations.
Voices from the Ohio Lawmakers
While the potential economic benefits of iGaming legalization are undeniable, the path forward has its fair share of challenges and considerations. State Representatives Jay Edwards and Nathan Manning, co-chairs of the study committee, emphasized the need for a holistic approach, considering the broader implications for lottery, horse racing, and charitable gaming within Ohio.
Edwards acknowledged the growing chatter among lawmakers regarding iGaming, expressing concern over the proliferation of one-off bills that fail to appreciate the industry’s larger picture. Meanwhile, Manning expressed surprise at the claims that iGaming could comprise a larger market than sports betting, underscoring the committee’s mandate to analyze the totality of legalized gambling within the state.
As the study committee’s June 30 deadline for submitting its findings and recommendations looms, the debate surrounding iGaming legalization in Ohio is poised to intensify. Policymakers must navigate a delicate balance.
The lawmakers will have to weigh the economic upside against potential social and regulatory implications while ensuring that any decision aligns with the best interests of the state and its residents. Meanwhile, Ohio players should brush up their blackjack knowledge and skills through dedicated practice and insightful literature.
Wrapping Up
The legalization of online gambling in Ohio presents a complex issue with no easy answers. While the potential economic benefits are undeniable, concerns about problem gambling and social impact cannot be ignored. As the debate unfolds, a measured approach that prioritizes responsible gambling practices and public input will be essential for making an informed decision about the future of mobile casino gaming in Ohio.
