It turns out the Ohio sports betting bill really did please almost no one. Members of the Senate Select Committee on Gaming heard the ire from interested parties Wednesday at the first hearing since the bill’s introduction.
Sports teams, grocery stores, bowling centers and lottery operators tried to constructively express their frustrations with the bill. Some handled it better than others.
As introduced and already amended last week in committee, S 176 allows a confusing open-market access to 20 retail and 20 online sports betting licenses with unlimited online skins. It also permits lottery retailers to offer a limited sports lottery pool.
The bill doesn’t specify what brick-and-mortar entities in the state can hold Type B retail licenses. For Type A online licenses, it only says a “sports gaming agent shall maintain at least one place of business in this state.”
Sen. Kirk Schuring, chair of the committee, did not have to hear the ire over the bill he was put in charge of crafting. Schuring missed the hearing due to illness. Sen. Nathan Manning ran the proceedings.
Sports teams want explicit access to more limited market
Ohio sports teams see the proposed 20 online and retail licenses as the perfect number for Ohio’s nine professional sports entities and 11 casinos/racinos.
Doug Healy, CFO of the Cincinnati Reds, explained:
“Frankly, the current legislation enhances the out-of-state gaming interests’ ability to procure market access in Ohio without rewarding the stakeholders who have invested billions of dollars and employed tens of thousands of Buckeyes.”
For teams to participate, Ted Tywang of Haslam Sports Group, which includes the Cleveland Browns, asked for statutory language to require teams designate a licensed, regulated online betting provider that would handle all operations.
“Through the requirements that the licensees themselves bank the bets, and that each license in the Type A group for mobile and online would have an unlimited number of deployable mobile licenses, these provisions would flat out prevent our participation based on our business structure and league rules,” Tywang said.
Team representatives asked to limit online skins to one for each sports entity and racino/casino.
“We do understand and are sympathetic to the sponsors’ desire to put in a free-market structure,” Tywang said. “However, in the case of sports wagering, the supply, ie Ohio bettors, is a closed market and hence does not respond properly to unrestricted competition as contemplated by the current bill. We feel strongly that there must be limits on the number of sports betting platforms.”
Tywang added that the online market could always be expanded, but that would be difficult to roll back from the initial law if Ohio starts with too many operators.
Healy also wants sports teams and casinos named in the bill as priority Type B retail licenses.
The sports teams also asked that the legislation include a concrete and accelerated timeframe for regulatory implementation.
Lottery sports betting model called a “scam”
During previous committee hearings, lottery retailers from bowling allies to grocery stores asked to participate in sports betting through lottery kiosks.
The bills grants them limited access to sports betting through a lottery pool. How it works is people can buy a fixed-price $20 ticket picking the winner of a game. The lottery takes a fee from each ticket. The remaining money gets paid out equally among the winning bettors on that game.
David Corey, executive vice president of the Ohio Bowling Centers Association, explained why that model won’t work.
“Let’s say the Browns are playing the Steelers, and the Browns are favored by 20… Since the pool idea is just betting on the winner with no odds or point spread involved, almost everyone will bet the favorite, especially in that situation. So, for example, you’ve got 10,000 people that bet the $20 that you’re limiting in the bills, 8,000 people bet on the Browns, 2,000 people bet on the Steelers.
“Now, remember, you took $5 of that $20 and gave it to lottery right off the top, it said in this bill. So you’ve got … $150,000 total in the pool for the winnings. So if the Browns win, those 8,000 bettors who bet on the Browns would only get a payout on their $20 bet of $18.75. After the first week of this, no one’s going to use this! They’re going to figure out that it’s basically a scam.”
The bill doesn’t require the lottery to take $5 off the top. That number is left to the lottery to decide. But he has a point.
Testimony from the Ohio Grocers Association and Ohio’s lottery operator, Intralot, agreed with Corey. They all asked for more regular odds wagering in sports betting kiosks.
Local colleges again ask to be excluded
C. Todd Jones of the Association of Independent Colleges and Universities of Ohio asked the committee to limit college sports betting to football and basketball.
Previously, an Ohio collegiate council asked the committee to exclude betting on in-state colleges. Realizing the demand for betting on Ohio State sports, the committee rejected that notion.
Jones said he understood the committee wanted to regulate betting that is already taking place. But betting isn’t happening on women’s tennis at a small school.
He did make a salient point people were looking for anything they could bet on when sports were shut down by the pandemic.
“All you must do is look at 2020 during the pandemic,” Jones said. “When all sports stopped operating, did bookmakers stop taking bets? No. In October, the Indiana Gaming Commission approved betting on the Major League Eating Halloween Candy Eating Championship. Halloween Candy.”
At the minimum, he asked the committee to exclude betting on college esports and club sports.
Sen. Niraj Antani, a co-author on the bill, asked why it’s not enough that the bill authorizes the Ohio Casino Control Commission to determine what college betting is appropriate. Jones said that was a burden for these small colleges to pursue.
Next on Ohio’s regularly scheduled Wednesday soap opera
Schuring wasn’t the only character missing from this episode.
Also absent were representatives from Ohio’s casinos and racinos.
You can be sure that it wasn’t because they had no issues with the bill. Eric Schippers of Penn National Gaming, which operates four of Ohio’s 11 casinos/racinos, tells PlayOhio he will testify next week.
Tune in at the usual time, 4 pm EST on The Ohio Channel.