Ohio Legislature Passes Retail and Online Sports Betting Bill

This past Wednesday, December 8, the Ohio state legislature passed a bill that would legalize retail and online betting on college, professional and esports. Ohio Governor Mike DeWine has indicated he will sign the bill in the coming days.

Regulatory Framework

Under the bill, retail and online sports betting are governed by the Ohio Casino Control Commission (the Commission).   The Commission will have the authority to issue up to 25 Type A Sports Gaming Proprietor Licenses (Type A License), which give license holders the ability to conduct online sports betting in the state, and up to 40 Type B Gaming Proprietor Licenses (Type B License), which give license holders the ability to conduct brick-and-mortar sports betting.  Although there are no restrictions with regard to eligibility for a Type A or Type B License, the bill requires the Commission to “give preference” to professional sports organizations, casino operators, and racino operators. Factors that may influence licensing decisions include an applicant’s “reputation, experience and financial integrity,” as well as the “nature of the applicant’s current or intended physical presence” in Ohio, as well as any planned “expenditures for physical infrastructure.”

Type A licensees will be permitted to partner with online betting platform operators, referred to in the bill as “mobile management service providers,” who may conduct and manage online betting operations on the licensee’s behalf. The bill allows each Type A Licensee to contract with only one online betting platform, except Type A Licensees who are professional sports organizations, casinos operators or racino operators will be permitted to partner with a second online betting platform if they demonstrate (i) a second platform would “generate an incremental benefit to the state beyond the economic benefits generated” from the first platform; and (ii) the licensee’s agreement with the second platform operator will not prevent another Type A Licensee from securing a contract with an online betting platform operators. Prior to contracting with a Type A licensee, an online betting platform must obtain a Mobile Management Service Provider License from the Commission.

The bill further requires Type A Licensees maintain a physical presence in the state, by either (i) operating a brick-and-mortar sports betting operation under a Type B License; or (ii) maintain at least one professional place of business in Ohio that regularly employs multiple personnel. The bill also provides that the servers responsible for accepting online sports betting wagers must be located at a secure facility in Ohio.

State Lottery Participation

Notably, the bill allows the Ohio State Lottery to offer sports wagering as part of the statewide lottery program under the oversight of the Commission. Under the bill, the Lottery may offer sports betting at self-service or clerk-operated kiosks at bars or restaurants that have obtained a Type C Sports Gaming Proprietor License from the Commission.

Timeline for Launch of Retail and Online Sports Betting

It is too soon to predict precisely when sports betting will officially “launch” in Ohio, which will depend on how long it takes the Commission to promulgate sports betting rules/regulations and initiate the licensing process. The bill does, however, require the Commission’s Executive Director to designate a universal “launch” date sometime before January 1, 2023. So we expect the official launch to occur sometime in 2022.