Ohio could make nearly $32 million from sports betting before the state even takes its first legal bet.
Ohio sports betting doesn’t officially begin until Jan. 1, but the application fees from future sportsbooks are already rolling in.
Between brick and mortar sportsbooks, online betting apps and kiosks in bars and restaurants, Ohio has a lot of different businesses looking to get in on the action.
Application fees for Ohio sportsbooks
Sports betting could generate $50 million worth of taxes every year in Ohio. That’s a solid number, and the state’s pile of application fees will only add to it.
So far, Ohio has brought in about $9.6 million from these fees. That number grows every week depending on the number of new applicants.
The state is currently taking applications for six types of licenses.
Each license is different. Some are for sports betting suppliers, while others are for the different types of sportsbooks themselves.
With each type of license comes a different cost for its application fee. These fees are non-refundable, so Ohio won’t have to send back any of that $9.6 million, even if a company that applies is not approved by the state.
The chart below offers a quick glance at which type of sports betting licenses have provided the most application money for Ohio.
Online sportsbook applications from companies like DraftKings and FanDuel account for the biggest piece of the pie at over $3.7 million. The retail partners of those betting apps, like casinos and professional sports franchises, account for the second-largest set of application fees at $3.3 million.
Kiosk applicants have also done their fair share of the heavy lifting. These are local businesses like bars and restaurants that are hoping to add a sports betting kiosk to their properties.
Each of those applicants pays Ohio a one-time $1,000 application fee. Over 1,300 business have applied so far, so that money is adding up quickly.
Applications are still flooding in from the different types of licenses every week. Ohio releases an updated list of applicants every Friday.
In other words, that $9.6 million pile is still growing.
There’s plenty of time left before the start of Ohio sports betting on Jan. 1. Application fees could easily surpass the $10 million mark during the lead up to launch.
Ohio license fees are piling up
On top of those application fees, gambling companies will be paying Ohio for the sports betting licenses themselves.
These license fees kick in after the state has approved an applicant. It’s the final set of charges before a company actually receives its license.
Right now, Ohio is making even more money from these license costs than it is from application fees. Assuming the state approves every company that has applied so far, the total will add up to over $22.1 million.
The payment structure is a little complicated for each applicant.
Different companies pay different amounts based on the type of license, how many service providers they’re working with, whether they hold multiple licenses at a time and whether or not the applicant is a professional sports organization.
That $22 million figure doesn’t even include two of Ohio’s Type A applicants, which provide the most amount of money from their license fees.
Hollywood Gaming Dayton Raceway and Miami Valley Gaming and Racing haven’t announced how many providers they’ll be working with in Ohio.
Because of that, there’s no way to know for sure how much their license costs will be. Each will end up paying either $750,000 or $2.5 million depending on the latest updates for their applications.
Add the total license costs to the application total, and Ohio stands to make about $32 million from sports betting before a single bet is placed. That’s a big win for the state that will help make up for some of the smaller tax hauls during the first year of sports betting.
Annual fees and renewing sports betting licenses
Application and license fees are just the upfront costs. The approved businesses have to pay a separate fee every year in order to keep their licenses.
Assuming that Ohio approves all of the applicants that have filed their paperwork, annual fees could add another $5 million annually. That’s in addition to the $50 million that Ohio could be collecting every year from sports betting taxes.
On top of all of this, there’s the cost for license holders to renew everything. In Ohio, sports betting licenses last five years each. After that, each company will have to send in another round of fees to keep the train rolling.
Companies will have to reapply for a license in order to renew their existing one, so the entire process will essentially start from square one again in five years.
The exception to this is Type C Sports Gaming Proprietors, which will help run the kiosk side of Ohio’s sports betting industry. Those licenses will only cost $25,000 to renew after five years. That’s much lower than their original costs, which are either $100,000 or $50,000 depending on the business.
All of this is a detailed way of saying that sports betting is already providing Ohio with piles of money.
License fees and application costs totaling $32 million before betting even begins is a great haul. Add that to a potential $50 million worth of yearly taxes and $5 million more from annual fees, and Ohio is in a phenomenal position to profit from its new sports betting industry for years to come.