In Ohio, legislators passed bipartisan placeholder bills in the House and Senate in late July. The legislation, in its entirety, states, “It is the intent of the General Assembly to develop and enact legislation legalizing sports wagering.” State Senator John Eklund, the lead Republican sponsor for the gambling legislation, said, “There is absolutely no question in my mind it can be done statutorily. Nobody has offered me a real legal analysis to counter mine.” Eklund said, “I’m very keen on having some hearings and hearing from voters and the interested parties. It’s time we started getting the lay of the land in terms of what everybody’s ideas are.”
But state Senate President Larry Obhof said he believes sports gambling only can be accomplished through a constitutional amendment. “For me it’s a pretty easy question. I’m sure plenty of people disagree, but I think the constitution generally forbids gambling, that it has specific narrow exceptions that have been adopted by the voters. I don’t see sports betting in there.” But Obhof said he was open to holding hearings. “Now, once we start to have hearings and air that subject out, we’ll give people who disagree with that perspective the opportunity to share it,” he said.
Ohio gambling interests see the cup half full. Bob Tenenbaum, a spokesman for Penn National Gaming, which operates four casinos and racinos in Ohio, said, “We were very encouraged by the legislature’s willingness to deal with this issue, and we certainly hope to be involved in the process and making our views known.
One concern is that Ohio is taking too long to move on sports betting, while Wheeling Island casino, located on the Ohio state line, recently opened its sports book. Jay Masurekar, head of Cleveland-based KeyBanc’s gaming, internet and travel services division, said, “Whoever goes first and starts making revenue right away can make investments in their properties. It’s very tough to match that level of investment if you come in late.” Nonetheless, he said, “If the lawmakers in Columbus play their cards well, we should be able to do it probably sometime in the next three years. I believe that kind of market will be operating.”
Sportsbook revenue, however, generally is not a big money-maker for a casino. Penn National’s Tenenbaum said, the profit margin on sports betting is usually about five percent, and legal operators have to pay employees and operating costs out of that revenue. “out of $100 bet in Nevada, the profit is usually works to be a little more than one dollar. But it’s a great amenity to have for our customers. We think it’s a really good offering and that it could potentially attract new customers.”
A report by Oxford Economics for the American Gambling Association indicated sports gambling could generate revenue of $35.4 million a year for Ohio, assuming a tax rate of 10 percent, with “moderate availability,” increasing to $61.1 million a year with “convenient availability.” Casino and racino lobbyists estimate sports betting revenue of $24 million a year in first-year revenue at a 9 percent tax rate.
One major factor in any estimates is whether there would be a mobile option. Masurekar said, “This is going towards online gaming whether we allow it at first or not. Then you have the gambling structure in place of the casinos and racinos, but the smaller retail establishments like bars and restaurants can benefit by fans coming in to watch the games.”
Ohio State University Athletic Director and expanded gambling opponent Gene Smith said he assumed online betting will become a reality. “Why not? We’re going to have wifi in the stadium. I’m sure one day that people will be betting like that on their apps. It’ll be legal, and it won’t just be football; it’ll be all the sports. I’m not alarmed by it, but we do have to be aware.”
Smith said legal sports betting would raise new issues. He and other Bit 10 officials have suggested that the NCAA adopt a uniform injury report like the NFL’s weekly report. Smith said a uniform system for reporting suspensions also would be a good idea. He said he wants to “double down” on the compliance education given to student-athletes and staff. “We will probably go deeper and more nuanced into the kinds of things that people bet on,” Smith said.
He acknowledged although he’s against legalizing sports betting he understands “it probably will bring more attention. I think we are going to see more people watching a lot of games. They are going to be betting these games across the board.”
Ohio University Professor Dave Ridpath, formerly a compliance official at Marshall University and Weber State, said sports betting’s positives will outweigh the negatives. “It’s easier to gain control of something once it is out in the open. I would hope some of the revenue stream finds its way back to athletes and not to raise coach salaries even higher and build shiny new facilities. This is something coming out of the shadows that can benefit athletes,” he said.
