Missing Disparity Study Could Delay Ohio Sports Betting

Written By Steve Friess on July 25, 2022 - Last Updated on September 21, 2022
Ohio Statehouse

Despite a clear directive in the 2021 law that legalizes sports betting in Ohio, the state has not commissioned a required disparity study of the industry that some lawmakers say was intended to take place before licenses could be issued.

The Ohio Casino Control Commission set a January 1, 2023 date for the launch of sports betting in Ohio. That means the OCCC must issue licenses in the next five months, a process that is underway. But the state’s Department of Administrative Services, which is charged in the law with conducting the study, has no such study underway and, according to its spokeswoman, also no timeline for when it will take place.

The law, HB 29, was passed and signed in December following years of negotiations. A provision added at the insistence of some Black lawmakers requires the DAS director, currently Kathleen Madden, to:

“…determine whether, and the extent to which, qualified persons experience discrimination or disadvantage in the sports gaming industry on the basis of their membership in a racial minority group, their color or ethnicity, their gender, or their disability. The director shall provide the results of the study to the Ohio casino control commission and shall inform the commission whether, in the director’s opinion, the results of the study warrant action by the commission.”

Litigation possible over what law requires

With no such study conducted — a revelation uncovered by PlayOhio – some lawmakers question whether the state can start issuing licenses. OCCC spokesperson Jessica Franks told PlayOhio via email: “The study is not required to be completed prior to the Commission issuing licenses pertaining to sports gaming.”

While the language of the law does not specify when a study must be done, State Sen. Cecil Thomas disagreed with Franks’ assertion. Thomas is a co-sponsor of HB 29 and a Democratic member of the Ohio Senate’s Select Committee on Gaming. The senator told PlayOhio that he will be asking the Legislative Service Commission for an opinion. “As a member of the committee, I thought the intent of the committee was that the study would be completed first,” he said.

Thomas also expressed outrage that the law had evidently been ignored:

“It is disturbing to hear that the department has not hired a company to do this study. It makes no sense to do the study after the licenses are already issued. What’s the purpose of the study if it isn’t to inform decision makers on how to develop a sports betting licensing system that is open and fair to everyone in Ohio and does not favor one group over another, whether it is based on gender, race, ethnicity or disability, and where both groups are qualified.”

Efforts to reach members of the OCCC through Franks were unsuccessful. Franks told PlayOhio it would be inappropriate for commissioners to comment on the matter. “As the study has not yet been conducted, it would be premature for members of the Commission to discuss potential outcomes,” she said.

Update: WCPO Cincinnati reports that as of Sept. 20, only one of the first 45 kiosk host licenses in Hamilton County went to a minority-owned business.

OCCC commissioners silent

PlayOhio also attempted unsuccessfully to reach OCCC Chairwoman June Taylor, a longtime champion of racial equity in business, through her office as CEO of the telecommunications firm Mac Installations and Consulting.

The company’s website boasts that it is a National Minority Supplier Development Counsel-certified organization and notes that in 2018 Taylor received the Director’s Award for Excellence in Diversity and Inclusion by the American Council of Engineering Companies and the Ohio Contractors Association. She was referred to as the “Harriet Tubman of Diversity” by the keynote speaker when she received that honor.

Another OCCC commissioner, Will Lucas, also has a long track record of supporting and promoting diversity.

Lucas is founder and CEO of Creadio, a marketing and production firm that “is brand manager for AfroTech, the largest Black tech digital platform and conference globally.” He’s also on the Ohio Martin Luther King Commission, which, per its website, seeks to “promote diversity and eliminate discrimination through nonviolent methods,” and in 2015 made Business Insider’s list of “The 46 Most Important African-Americans In Technology.” He also could not be reached.

In the law, the OCCC is also charged with deciding whether the analysis of the industry warrants creating “goals to ensure that sports gaming licenses are issued to applicants … on an equitable basis with other applicants.”

Maryland disparity study stalling online betting launch

If controversy over a disparity study slows down the launch of sports betting in Ohio, it wouldn’t be the only state where that has happened.

In December, the Sports Wagering Application Review Commission in Maryland said it would await the results of a disparity study being overseen by the state attorney general’s office before issuing online sports betting licenses.

The AG’s office must complete the study, then decide whether the outcome would legally justify implementing race- or gender-conscious measures to foster diverse ownership and leadership for licensees. Most experts think Maryland won’t be ready to launch online sports betting until fall 2022 or early 2023; the most optimistic predictions are sometime during the coming NFL season.

Gaming law expert John Holden of Oklahoma State University says the language of the Ohio law is vague enough that the OCCC might be able to issue licenses in time for its Jan. 1 launch. He also noted that even if the commission wanted to create remedies to help people of color in the industry, it could get legally difficult because courts routinely void efforts to create licensing systems that give any minority group an advantage.

“It’s pretty easy to put this stuff on paper, it’s a lot harder to operate a market that actually stands behind these principles,” Holden says. “It’s not simply, ‘OK, well, we’ll give these disadvantaged people licenses.’ It’s not that simple.”

What such studies may find

The specifics of how either Ohio or Maryland will assess diversity are unclear, but even a casual look around the casino industry suggests that by almost any metric the situation is bleak for people of color. (The exception, of course, is the heavy dominance of Native American ownership across the country on sovereign lands which, in turn, is a form of reparations for centuries of displacement at the hands of European colonizers and, eventually, the United States government.)

There are believed to be no Black-owned brick-and-mortar casinos in the nation. In November, voters in Richmond, Va., narrowly rejected a proposal from Alfred Liggins, CEO of the media conglomerate Urban One, for the company to build a $565-million resort. Liggins told reporters the project would create “the only Black-owned casino in the United States of America.” The Richmond City Council, hoping for a different result, plans to hold a second referendum this fall.

Historically, there have been so few Black casino entrepreneurs that those who have existed became legends. In 1950, Sarann Knight-Preddy, who died in 2014, became the first African-American woman to receive a gaming license when she bought the Tonga Club in tiny Hawthorne, Nev. Don Barden, who died in 2011, became the first Black casino owner in Las Vegas in 2002 when he bought the Fitzgerald’s and at various points owned six casinos in five states.

Beyond ownership, the number of non-indigenous people of color in upper management in the industry is microscopic. PlayOhio reviewed the lists of executives and board members of more than a dozen casino-related companies. While most had had least one person of color on their corporate boards, the upper-level management was overwhelmingly white, Native American or, often when a company has interests in the Far East, Asian.

Industry exec: Disparity issue could get worse

Rose McKinney-James, who chairs MGM Resorts’ corporate social responsibility and sustainability committee, predicts that the question will only loom larger as state after state expands its gaming options.

“Most companies have this on their radar screen because their investors are creating that expectation, but what you’re seeing in Maryland is what you will likely see in other jurisdictions where there is an expectation that the leadership of a company and the decision-makers represent some diversity of thought and background,” said McKinney-James, one of two Black members of the MGM board and among a small handful of people of color on corporate boards of publicly traded gambling companies.

Yet Ohio’s political landscape is significantly different than that of Maryland. The Old Line State has the largest Black caucus of any state legislature, and both houses are dominated by Democrats. Republicans control both houses of the Ohio Legislature and almost every statewide elected office.

“Ohio Democrats may well be powerless here, given that the Republicans run everything,” says one Democratic member of the state assembly who asked to speak on background because they are unbothered by the lack of a diversity study. “Nobody’s going to let the state miss out on millions of dollars because of this. It’s ridiculous.”

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Steve Friess

Steve Friess is the national gambling industry correspondent for PlayOhio. He is also a contributing writer for Newsweek. A Long Island native who earned a journalism degree at Northwestern University, Friess worked at newspapers in Rockford, Ill., Las Vegas, and South Florida before launching a freelance career in Beijing, China, where he served as chief China correspondent for USA Today. After his return to the U.S. in 2003, he settled in Las Vegas, where he covered the gambling industry and the American Southwest regularly for The New York Times, Playboy, The New Republic, Time, Portfolio, BusinessWeek, Newsweek, New York magazine, and many others. During that time, he created and co-hosted two successful and groundbreaking podcasts, the celebrity-interview show The Strip and the animal affairs program The Petcast. In 2011-12, Friess was a Knight-Wallace Fellow for at the University of Michigan. That was followed by a stint as a senior writer covering the intersection of technology and politics at Politico in Washington, D.C., In 2013, he returned permanently to Ann Arbor, where he now lives with his husband, son, daughter and three Pomeranians. He tweets at @SteveFriess and can be reached at [email protected].

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