AGA Report: Ohio Sports Betting Legalization Sparks Surge In 2023 Gaming Revenue

Written By TJ McBride on May 23, 2024
AGA Report Ohio Sports Betting Growth

The American Gaming Association has released two new reports on Ohio gaming: the 2024 State of the States and the Q1 2024 Commercial Gaming Revenue Tracker.

These reports revealed that United States commercial gaming generated record-breaking revenue in 2023 for the third straight year. The total revenue from commercial gaming, which does not include tribal gaming, was $66.7 billion. That is 10.3% more than the year prior, when $60.5 billion was generated in 2022.

Ohio sports betting and retail casinos both contributed to the Buckeye State’s record-breaking year. Even with such gaming success in 2023, some are wondering how much revenue could grow if Ohio online casinos are legalized as well.

Ohio gaming revenue grew by 42.3% in 2023 thanks to legal sports betting

The American Gaming Association reported that 32 of 36 jurisdictions with gaming, including states and the District of Columbia, saw an annual increase in gaming revenue in 2023. That was also true for Ohio, which saw a big boost from the legalization of sports betting.

Based on data provided by the American Gaming Association, Ohio commercial gaming revenue increased by 42.3% in 2023 compared to the year prior. In 2022, Ohio generated $2.3 billion in revenue, but that ballooned to $3.3 billion in 2023.

Ohio sports betting first launched in January of 2023 to kick off the new year. That means a large portion of Ohio gaming revenue growth from 2022 to 2023 can be attributed to sports betting.

According to another report released by the online lending marketplace LendingTree, Ohio sports betting tax revenue amounted to the fifth-highest sum of any U.S. state in 2023 with $136.3 million. Clearly, the Ohio sports betting market hit the ground running.

In addition to sports betting contributions, Ohio is also fourth in tax contributions from commercial casinos, according to the American Gaming Association, with $929.9 million of taxes paid in 2023, an increase of 19.1% from 2022.

Ohio gaming revenue dropped by a reasonable 16% in Q1 2024

Despite the massive growth in 2023 compared to 2022, Ohio gaming revenue saw a sizable dip in the first quarter of 2024 compared to the same time in 2023. Ohio generated $840.2 million of commercial gaming revenue in the first quarter of 2024 which was 16% lower than Q1 2023. That seems alarming on the surface, but there is more nuance involved. 

First, Ohio sports betting debuted in Q1 2023. And since launches typically lead to inflated financial figures, that dramatically skews any comparison to a typical quarter. The American Gaming Association report noted that Ohio saw a 37.1% drop in sports betting handle when comparing the first quarters of 2023 and 2024.

On top of those issues, the bad weather in January and February also limited retail gambling facilities in the state. And unexpected results during March Madness hurt operator revenue totals.

Judging by the numerous negative factors, the dip in Q1 2024 could have been even worse. Ohio gaming managed to escape relatively unscathed overall.

Online casino legislation could help bolster the bottom line, but there is plenty of opposition

Some Ohio legislators and stakeholders are starting to seriously consider adding online casinos to the state’s suite of gaming options. And it is not hard to see why. 

In the State of the States 2024 report from the American Gaming Association, it outlined that iGaming grew by 28.2% in 2023. Despite only operating in six states, iGaming revenue reached $6.17 billion without any state expansion.

Ohio legislators have begun taking testimonies related to iGaming from interested parties to gauge interest and educate lawmakers. State Rep. Jay Edwards outlined this process to PlayUSA earlier this year.

“What we’re trying to do is start the conversation, get best practices, educate members and allow regulators some input on the process so that when we are ready, we can start to implement that.”

PENN Entertainment was one of the groups that voiced support for online casino expansion. Vice President of Public Affairs and Government Relations Jeff Morris wrote the testimony, which says:

“Like others in the industry, PENN supports the legalization of internet gaming as a key catalyst for growth, as it can be complementary to existing brick and mortar business and drive gaming and associated tax revenue. As you are aware, the border states of Michigan, Pennsylvania, and West Virginia allow for iGaming, and we are proud to offer our online Hollywood Casino products in these states. Coupled with our existing casino properties and ESPN BET sports betting app, the inclusion of iGaming in these states has resulted in PENN becoming a best-in-class omni-channel provider of entertainment to these constituencies.”

Others, such as JACK Entertainment which owns JACK Cleveland Casino and JACK Thistletown Racino, have opposed iGaming expansion. In its testimony written by Senior Vice President of Government Affairs Daniel Reinhard, JACK Entertainment made this clear:

“iGaming as presented to this Commission will not bolster Ohio’s gaming climate or benefit Ohioans. The proposal is flawed under the Ohio Constitution and Ohio court decisions. Ohioans can observe their local malls to understand the impact that iGaming will have on local economies. Just like online retail has decimated local retail, iGaming will do the same under any logical scenario. iGaming will damage Ohio businesses and cost Ohio jobs leading to diminished capital investment and degradation of Ohio’s existing tax base.”

Although it is unlikely that legislation for online casinos will be filed this year, the process has already begun.

Photo by Dreamstime / PlayOhio
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TJ McBride

T.J. McBride is a Denver-based writer and reporter who covers sports betting for PlayOhio. His work has been featured on ESPN, CBS Sports, FiveThirtyEight, Bleacher Report and Yahoo Sports, among others.

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