Ohio is well on its way toward meeting a Jan. 1, 2023 deadline to legalize sports betting in Ohio. But the door is still open for legislators and operators to launch Ohio sports betting before that date.
Launching sports betting ahead of September’s 2022 NFL kickoff is a dream scenario for Ohio, at least from a revenue perspective. According to a PlayOhio analysis, missing out on the NFL Week 1 kickoff will start a healthy tab of missed opportunities for sportsbooks and state coffers.
Based on an analysis of other states and the fact that Ohio boasts two NFL franchises, PlayOhio estimates that legal sportsbooks in Ohio would bring in as much as $130 million per week in NFL betting volume alone during the 2022 NFL season.
The weekly gross revenue — or combined win for the sportsbooks — could come out to around $7 million per week when live, spurring upwards of $700,000 in tax revenue per NFL week. However, promotions and the timing of daily reporting make it difficult to project exactly how much tax revenue Ohio will add per week. The state cannot exceed a 10% tax rate, so any adjustments will reduce that rate and the total tax revenue figure.
“If Ohio does wait until the new year to launch, the opportunity cost will be substantial,” says PlayOhio analyst Eric Ramsey.
“In sports betting, there is no substitute for the NFL season. But considering the strength of Ohio’s overall regulatory framework for sports betting so far, the cost of being so deliberate may prove one worth paying.”
Football will be a major chunk of Ohio sports betting
Looking across its own borders, the Buckeye State is clearly not early to the game. But so far, Ohio has designed a sports betting environment that rivals the nation’s leaders.
According to the PlayOhio analysis, Ohio sports betting could generate $9 billion to $12 billion in total annual handle within its first few years. Given the trends elsewhere and the runway that operators have to prepare for launch, Ohio’s sports betting market is looking at a very speedy ramp-up.
Ohio’s handle could even reach $8 billion to $10 billion in Year 1.
Football betting represents around 30% of national handle, and Ohio offers a robust collection of teams bettors are interested in. The Cincinnati Bengals played in the Super Bowl last year, and the Cleveland Browns are expected to push for a playoff spot this season. Both teams rank among the top-11 best odds to win Super Bowl 57 at Caesars Sportsbook.
Ohio State University is a perennial NCAA national title contender, and the University of Cincinnati made the College Football Playoff last season. Ohio also has six more FBS college football teams, which all play in the Mid-American Conference.
PlayOhio estimate: 85% of football bets will be on NFL
PlayOhio estimates that Ohio’s football betting handle will include 85% NFL and 15% college, based on reporting in other states and Ohio offering two NFL teams.
If football betting represents one-third of an estimated $10 billion handle, Ohio will attract about $2.8 billion in NFL bets and around $500 million from college football.
The $2.8 billion season-long NFL handle split across 18 regular season weeks, three playoff weeks and the Super Bowl is nearly $130 million per week. That $130 million average would amount to more than 1% of the state’s projected annual sports betting handle every NFL weekend.
For the season, NFL betting in Ohio would bring in an average of $7.5-$8 million in handle per game. Nationally, sportsbooks hold 5.4% of football bets. That means Ohio can expect $400,000-$450,000 in operator revenue per NFL game — or about $7 million in weekly gross NFL revenue.
Projecting taxes from sports gaming is complicated, but the numbers are big
Using raw revenue, the 10% state share of $7 million gross NFL revenue would be $700,000 per week of NFL games. As noted, that figure could be high. But missing the start of the 2022 NFL season will reduce the season total and the total amount bet on the 2023 Super Bowl through futures bets.
A conservative estimate of tax revenue for the 2022 NFL season based on the overall numbers would be about $400,000-$500,000 per week, according to the PlayOhio analysis.
Ohio’s sports betting law allows for the creation of up to 46 online sports wagering sites/apps, 40 retail sportsbooks and potentially thousands of sports betting kiosks at restaurants, bars and grocery stores throughout the state that offer Ohio Lottery terminals.
PlayOhio will continue to cover Ohio launch news as the state moves closer to legalizing sports betting.
Other betting states offer a glimpse of what Ohio can expect
Colorado, Illinois, Mississippi, Nevada and Oregon report their percent of handle by sport. These states’ sports betting rules and offerings vary, as do their collections of professional and college sports teams.
Football averages a 25.6% handle across these five markets. Nevada’s 33.6% is a better projection for Ohio, because Ohio has two NFL teams compared to one for Colorado and Illinois. Nevada just has the Las Vegas Raiders, but the state essentially represents a melting pot of bettors from across the country.
Oregon and Mississippi do not have NFL teams.
Ohio sports betting is coming, launch date still unknown
The Ohio Casino Control Commission must complete its preparations and get sports betting underway no later than Jan. 1, 2023. The commission has so far passed four of five batches of rules governing gaming in Ohio.
One prominent member of the commission indicated in December that the Jan. 1 deadline is the most likely date for launch and that sportsbooks and the public should not expect anything sooner.
This month, gaming attorney Daniel Wallach told the Springfield News-Sun that he believes the state has made enough progress to potentially launch by the start of the 2022 NFL season.
Ohio State Sen. Niraj Antani, who sponsored the bill that legalized sports betting in Ohio, also said he is optimistic that the state could launch early.