After months of negotiations, the Ohio Legislature recently passed HB 29 to legalize and regulate sports betting. Passed on December 8, 2021, the bill is now headed to the desk of Ohio Governor Mike DeWine, who previously opined that sports betting in the Buckeye State was “inevitable.” Once the bill is signed, sports betting will launch no later than January 1, 2023, and provisional gaming licenses will be awarded through June 30, 2023.
HB 29 legalized sports betting at brick-and-mortar facilities, terminals in bars and restaurants and the online marketplace. Notably, non-pari-mutuel horse racing was removed from the bill, but a section for wagering on organized video game competitions, also known as esports events, was included. The final bill also removed provisions requiring that proprietors use official league data to set the outcome of proposition bets.
The bill provides that the Ohio Casino Control Commission (OCCC) will license sports gaming proprietors under Type A, Type B and Type C licenses. Type A licenses are typically reserved for mobile gaming and professional sports and will be limited to 25 at any one time. However, the bill provides that the OCCC can issue additional licenses to applicants who demonstrate that the sports gaming market needs more Type A proprietors. Any licenses granted after the initial 25, however, will only be permitted to carry one mobile management services provider instead of two. With regard to mobile gaming, Type A proprietors will initially be limited to just one branded website, or skin, but will have the chance to earn a second skin if the proprietor can prove incremental economic benefit to the state. Type B licenses for brick-and-mortar operators will be capped at 40, while Type C self-service terminal proprietors will be limited to 20. No matter the type of license, the license term will now be for five years, as opposed to the three years in the original bill.
The bill levies a 10% tax rate on all net revenue. As for fees, Type A license fees will be the most expensive, ranging from $500,000 to $2.5 million depending on whether the gaming proprietor is a professional sports organization and how many mobile management service providers it employs. Type B and C license fees, on the other hand, will range from $50,000 to $100,000 per license depending on the nature of its business. The fees, which are non-refundable, must be paid within the five-year license term.
Following the 2018 U.S. Supreme Court decision striking down the Professional and Amateur Sports Protection Act, states are now free to legalize and regulate sports betting within their borders. As a result, numerous states have passed similar legislation legalizing sports betting. Fox Rothschild’s Gaming Practice Group remains on the cutting edge of casino and gaming law and has deep experience in state, federal, and international gaming regulatory practice.