The Ohio House Finance Committee recently held a hearing on state Rep. Dave Greenspan’s HB 194. Although the legislation does not include a mandate to use official league data or an integrity fee, Eric Schippers, vice president, public affairs and government relations at Penn National Gaming, made his opinion clear regarding those two subjects.
Schippers said the leagues’ desire that sportsbook operators must use official league data is a “money grab that’s in lieu of not being able to get the integrity fee,” which would take a large portion of sports betting operators’ already slim margins.
To date, no state has included the integrity fee in sports betting legislation. “When the cost was denied by all these states in terms of an integrity fee, suddenly you heard we should mandate official league data. There was never any opposition from the leagues to say, ‘Hey, we need a piece of that or we want to add on top of that.’ You just go buy your data,” Schippers said.
He noted an American Gaming Association report indicates the four sports leagues will earn a total of $4.2 billion from legal sports betting, so they don’t require further incentive to maintain the integrity of their product. “We don’t believe there should be an added fee for the leagues on the area of integrity. Already baked in, in everybody’s interests, is ensuring integrity–from a regulator’s standpoint, from an operator’s standpoint and from a league’s standpoint,” he said.
Schippers also said he has no argument with HB 194 making the Ohio Lottery Commission the regulator of sports betting as long as it’s not a competitor. The measure also would allow veterans and fraternal organizations to offer sports betting. Another sports betting bill, SB 111, sponsored by state Senator John Eklund, would establish the Ohio Casino Control Commission as the regulator and limit sports betting to the state’s 11 casinos and racinos.
Greenspan said the Lottery Commission uses a closed-loop broadband intranet for lottery transactions, which would ensure mobile wagers are placed within the state. “That’s why this bill and the Lottery Commission is the way to go because there’s already an intrastate network and environment set up,” Greenspan said.
MGM Resorts International Senior Vice President Ayesha Molino asked the committee to let regulators determine what types of wagers a gaming operator may offer. MGM Resorts International operates MGM Northfield. Molino said, “Customers already have access to all bet types on a robust black market with little repercussions. To be competitive against this market, regulated gaming operators must be able to provide consumers with a product that they want. As regulated operators responsible for paying out on bets, we have no interest in booking bets that can be easily manipulated or raise questions about the integrity of our gaming operations.”
She added, “We recognize that no batter can guarantee a home run in the 7th inning, no basketball player can guarantee a game-winning three-pointer and no quarterback can guarantee a 60-yard pass completion. As such, overbroad legislation that would restrict categories of wagers is not grounded in a meaningful analysis of integrity risk.”
HB 194 also recently was revised to include anti-money-laundering provisions. It now specifies interfering with a sports betting facility’s submission of reports under the Bank Secrecy Act of 1970, the Federal Deposit Insurance Act and state banking laws would be a fifth-degree felony on the first offense and a fourth-degree felony on subsequent offenses.
Greenspan added said numerous changes have been made to HB 194 ensure all aspects of online sports wagering would occur in Ohio, even including the computer servers. “In the whole bill, we talk about how this is an intrastate activity. All the transactions have to be in Ohio. The Lottery Commission already has that intrastate environment. What we’re doing is conforming to rules of the Wire Act,” he said.
