Four Policy Decisions Face Effort to Permit Sports Betting in Ohio

The U.S. Supreme Court recently, in Murphy v. National Collegiate Athletic Association, held an act of Congress that prohibited sports betting in all states but Nevada was unconstitutional.  This decision opens the door to sports betting in states like Ohio.  However, the decision really leaves policy makers with four critical policy decision very much shaped by current Ohio law and the state Constitution.

Should Ohio permit sports betting? With a Governor at the end of his last term and a General Assembly buried in leadership fights and short on legislative session dates, the chances of the 132nd Ohio General Assembly addressing the sports betting issue are slim.  However, a healthy discussion now in the General Assembly is productive if this is an issue to be address in 2019 with a new General Assembly and Governor.  Failure to address this issue from a legislative standpoint will likely lead to interests groups wanting to capitalize on legalize sports betting in Ohio with a chance to draft and promote their own legislative initiative or Constitutional Amendment to create sports betting in Ohio to their own benefit.

How much government revenue will be gained by permitting sports betting? Government revenue estimates are all over the place depending upon the source.  The additional money sports gambling could bring is attractive given that most states are seeing constrained revenue growth. Other legal forms of betting — such as casino gambling and betting on horse races — are already a $28 B industry in the United States.  Adding sports betting could boost that by as much as $41.2 billion, which the American Gaming Association found would net state and local governments about $3.4 billion in taxes. The American Gaming Association’s economic impact statement for allowing sports betting estimates Ohio would gain $ 19.0 M in total with $ 13.4 M in state revenue and $ 5.6 in the federal handle tax. Rhode Island estimated sport betting would net the state $24M. Of course, these are all revenue estimates and are likely to not meet actual revenue gained.

Who will be permitted to operate sports betting?  Sports betting needs to be authorized by state statute no matter the state. Ohio policy makers will need not only to permit sports betting but to think about how sports betting will work—will it be limited to specific facilities, will on-line betting be permitted, or will it be connected to the recently enacted “sports fantasy” gaming industry legalized in Ohio with Sub. HB 132.  Technology is impacting how people can bet on sports and the General Assembly will likely consider all these issues.

Who will regulate sports betting?   How sports betting will be regulated in Ohio is the most challenging issue. Article XV of the Ohio Constitution expressly permits three types of gaming in Ohio- lotteries, charitable gaming and the operation of four specific casinos.  The Ohio Lottery Commission regulates the state lottery.  While not a regulator, the Ohio Attorney General enforces the state’s charitable gaming law.  The Ohio Casino Control Commission of course regulates the handful of state casinos.  The Ohio Revised Code goes on to permit gaming (including slot machines) at Ohio horse racing tracks which are regulated by the Ohio Racing Commission. This does not count the fantasy sports industry who just passed their own legalization bill. All these versions of gaming could be natural venues to operate sports betting and many are regulated by different entities.  Any of these organizations or a new one could regulate sports betting.