Here’s What Was Likely Discussed At The Online Casino Hearing

Written By Mike Breen on February 21, 2024
A picture of a conference for a story about what was said at the Ohio online casino hearing.

Yesterday, Ohio lawmakers and regulators met to discuss the pros and cons of online casinos.

In addition to a thriving Ohio sports betting market, the Buckeye State has four casinos and seven racinos. Ohio online casino legalization would be the next logical step for expansion.

The General Assembly hearing was the first of four to be presented by the Study Commission on the Future of Gaming in Ohio. It’s an 11-member bi-partisan group consisting of legislators and representatives from the Ohio Casino Control Commission, Ohio Lottery and the Ohio State Racing Commission.

The study commission was co-chaired by Sen. Nathan Manning (R-North Ridgeville) and Rep. Jay Edwards (R-Nelsonville). Edwards told PlayUSA last month that the hearing isn’t about trying to push iCasino legislation forward. Rather, it’s more about giving fellow lawmakers a sense of what legal online casinos might look like in Ohio.

“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.”

Most OCCC hearings are live-streamed for public consumption. But this one didn’t have an online broadcast. As a result, we aren’t completely sure what was discussed.

But here’s what lawmakers and regulators likely debated yesterday.

OCCC to discuss potential online casino regulatory framework

While Ohio online casinos are illegal, players can participate in sweepstakes and social casinos online. They offer prizes that can be redeemed for real dollars.

Edwards said industry representatives were invited to provide testimony at the Feb. 20 hearing. Comments from the public were also encouraged.

Jessica Franks, director of communications for the Ohio Casino Control Commission (OCCC), confirmed to PlayOhio that representatives from the commission would also be participating in the hearing.

“The OCCC has been invited to provide a presentation/testimony. We will likely discuss our regulatory responsibilities and how we accomplish those.”

The OCCC would likely be the regulatory body overseeing online casinos.

Franks said the OCCC would be available in an advisory capacity as lawmakers weigh future online casino legislation.

“Whether to permit iGaming in Ohio is a policy decision for lawmakers. The commission is always available as a resource to discuss areas such as responsible gaming, regulatory best practices and consumer protections.”

Commission likely to talk about financial benefits

Edwards recently told Columbus’ WSYX ABC 6 that online casino discussions would look at the issue from all sides.

“What does that look like, casinos on the phone? Is that a problem? Is that a good thing? Is it bad?”

Edwards said one of the big upsides was the financial windfall online Casinos could bring to Ohio. Online casinos are legal in New Jersey, Connecticut and Delaware, and Ohio border states Pennsylvania, Michigan and West Virginia. In 2023, online casinos in those six states netted $6.5 billion in revenue.

Pennsylvania alone saw $1 billion in revenue from online casinos last year, Edwards told WSYX.

“I can tell you in these other states that have passed sports gaming that have also passed iGaming, the iGaming revenue is 10 to 12 times what their sports gaming revenue is.”

In Ohio’s first year of sports betting, sportsbooks generated $936.9 million in gross revenue, which resulted in $133.1 million in tax revenue.

How might Ohio tax online casinos?

The subject of how online casinos would be taxed in Ohio may also come up at the hearing. A look at revenue in other markets could inform the discussion.

  • New Jersey: The largest online casino market in the US has a 15% tax rate on gross online gaming revenue.
  • Pennsylvania: The state has a 54% tax on revenue from online slots, while it taxes online table games at 16%.
  • Michigan: the online casino tax rate ranges from 20% to 28%, depending on the amount of revenue generated.

Ohio has a 20% tax rate on sports betting revenue. The rate was raised over the summer in a provision signed by Gov. Mike DeWine that also created the Study Commission on the Future of Gaming. The initial rate when sportsbooks launched last January was 10%.

Who could be eligible for online casino licenses in Ohio?

Officials at the hearing could also discuss options for licensing online casinos.

Online casino operators could include those affiliated with Ohio retail casinos, like Hard Rock Bet Casino and the online Hollywood Casino (which is connected to the ESPN Bet app), and those connected to sportsbooks that operate in the state, like DraftKings Casino and FanDuel Casino.

The six states that currently have online casinos tether most online licenses to retail casinos in the state.

In New Jersey, the state’s nine retail casinos can offer up to five online casino skins. In Michigan, the state’s 15 online casinos are tethered to one of the state’s three retail casinos or one of the 12 Michigan tribes. No additional skins are permitted beyond the one.

It seems most likely that Ohio lawmakers and regulators would decide to allow the state’s 11 casinos and racinos to partner with online casino operators for licenses. They’d need to determine how many skins each would be allowed to offer.

The commission will additionally hold hearings on iLottery (Feb. 22), racinos and charitable gaming (March 19) and sports betting and daily fantasy sports (March 20).

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Mike Breen

Mike Breen covers Ohio’s budding sports betting industry for PlayOhio, focusing on online sportsbooks and the state’s responsible gambling initiatives. He has over two decades of experience covering sports, news, music, arts and culture in Ohio.

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