HB29: OHIO’S SPORTS BETTING BILL
Author: Jacob Ottaway, Senior Editor
With the passage of House Bill 29 (“HB29”) Ohio is slated to join one of the largest gambling markets in the world: sports betting.[i] HB29, signed into law by Governor DeWine in December of 2021, legalizes and regulates retail and online sports gambling.[ii] Though there is some controversy over HB29[iii], early projections show that sports betting will result in over $8 billion in additional revenue in 2023, its first active year.[iv] If such projections are accurate, Ohio would be among the largest gambling markets in the U.S., just short of Nevada, Illinois, New Jersey, and New York.[v] This blog focused on HB29, its structure, and its implications.
HB29 vests licensing and regulatory authority over sports gambling to the Ohio Casino Control Commission (“Commission”).[vi] The Commission, comprised of seven governor-appointed members[vii], has licensed over 1,382 locations with the ability to participate.[viii] Such licenses fall into three categories: Type A License, Type B License, and Type C License.[ix] Type A license holders are able to offer sports gambling through websites and mobile applications, though they must hold a Type B license and operate at a place of business within Ohio.[x] The UK based sports betting corporation, Betfred, partnered with the Cincinnati Bengals to apply for, and was conditionally granted, a Type A license.[xi] Type B license holders are able to offer in-person sports gambling at their qualified facility, but, in granting licensure, applicants must show they“conduct significant economic activity in the county” where the facility is located.[xii] The Cincinnati Reds have applied for, and are conditionally granted of, a Type B license.[xiii] Type C license holders are able to offer sports gambling through self-service or clerk-operated kiosks, though the type of wagers placed at such kiosks are limited to spread wagers, over-under wagers, moneyline wagers, and parlay wagers of no more than four components.[xiv] Type C License applications have been filed by bars, restaurants, bowling alleys, and convenience stores.[xv] There are other types of licenses available for business owners, but most fall under a sub-license grouping for those already licensed under the three forementioned categories.[xvi]
HB29 will allow for individuals over the age of twenty-one to bet on “any professional sport or athletic event, any collegiate sport or athletic event, any Olympic or international sports competition event, any motor race event, any horse race, or any other special event the Commission authorizes for sports gaming.”[xvii] Among the top expected revenue producers are the National Football League (“NFL”), National Collegiate Athletic Association (“NCAA”) basketball and football, and Major League Baseball (“MLB”).[xviii] Further, HB29 prohibits betting on “any sport or athletic event for primary or secondary school students that is conducted or sponsored by a primary or secondary school or by any other person,” along with any event that “involves athletes or participants who are under 18, unless the commission authorizes the event for sports gaming.”[xix] HB29 does not place prohibitions on bets placed by non-Ohioans who enter into the state, though it does require actual physical presence in the state in order to participate.[xx] As a result, Ohio’s passage of HB29 is likely to decrease the surrounding states sports-betting-related revenue, because Ohioans will no longer travel across state lines to place their bets.
Considering the influx of funds expected from the HB29 and its activity, the tax breakdown determines the allocation of such funds. Such breakdown allocates 51% of tax revenue to eighty-eight counties in proportion to their populations; 34% of tax revenue to eighty-eight counties in proportion to their public-school district student populations; 5% of tax revenue to the host city where casinos are located; 3% of tax revenue to the Commission; 3% of tax revenue to the Ohio State Racing Commission; 2% of tax revenue to the state law enforcement training fund; and 2% of tax proceeds to the Ohio Problem Gambling and Addictions Program (the “Program”).[xxi]
Out of the for-mentioned fund distribution avenues, the Program may bring some interesting legal questions to the state of Ohio. The Program attempts to address the current and future gambling addiction problems.[xxii] One area where the Program will attempt to address current and future gambling addiction problems is with gambling diversion courts.[xxiii] While the details of the process have yet to be established, these courts could have the power to hear and clear gamblers who are convicted of non-violent crimes in connection with their gambling addictions.[xxiv] Similar to established drug courts, the idea behind gambling diversion courts is to provide “rehabilitation and penalties other than incarceration to nonviolent offenders who committed crimes to feed their addictions.”[xxv] The legislative authority for such courts is unclear, but it is likely to be a derivative of the Supreme Court of Ohio’s power to create mental health courts[xxvi], as gambling addictions are a type of behavioral addiction that meets the criteria for eligibility and treatment under the Diagnostic and Statistical Manual of Mental Disorders.[xxvii]
Ultimately, Ohio will likely see a massive increase revenue produced from HB29, both from Ohioans and from Northern Kentuckians who wish to cross the river instead of heading to Indiana or West Virginia. Most local governments will see an increase in tax dollars derived from sports betting related activities. In addition, Ohio courts and/or legislation may have to address the constitutionality of gambling addiction courts and the power to exonerated individuals involved in non-violent, gambling-related crimes. The impact that flows from HB29, the legal questions that it brings, or the revenue it produces are yet to be seen, as HB29 will become active on January 1, 2023.[xxviii]
[i] AGA Commercial Gaming Revenue Tracker, American Gaming Association (November 9, 2022) https://www.americangaming.org/resources/aga-commercial-gaming-revenue-tracker/.
[ii] Summary of Ohio Sports Gaming Law, Taft 1 (Dec. 30, 2021) https://taftlawpr.blob.core.windows.net/taft/files/fileuploads/61ce223562ffbc0024ae10ac/Summary%20of%20Ohio%20Sports%20Gaming%20Law.pdf.
[iii] Steve Friess, Missing Disparity Study Could Delay Ohio Sports Betting, PlayOhio (September 21,, 2022) https://www.playohio.com/news/missing-disparity-study-could-delay-ohio-sports-betting/.
[iv] Ohio Revenue Forecast: Pre-Sports Launch Projections, PlayOhio (last visited Nov. 13, 2022) https://www.playohio.com/sports-betting/revenue/.
[v] Id.
[vi] Ohio Admin. Code 3772-2-01(A) (2022).
[vii] Id.
[viii] Danny Cross, Ohio Sports Betting, PlayOhio (Nov. 21, 2022), https://www.playohio.com/sports-betting/
[ix] Taft, supra note ii.
[x] Id.
[xi] Joshua Buckley, Who’s Applied For An Ohio Sports Betting License So Far?, NeoSports Insider (November 16, 2022) https://www.neosportsinsiders.com/ohio-sports-betting-license/.
[xii] Taft, supra note ii.
[xiii] Buckley, supra note xi.
[xiv] Taft, supra note ii, at 2.
[xv] Buckley, supra note xi.
[xvi] Taft, supra note ii, at 2-3.
[xvii] H.B. 29, 134th Gen. Assemb., Bill Analysis at 1 (Oh. 2022)
[xviii] PlayOhio, supra note iv.
[xix] H.B. 29, 134th Gen. Assemb., Bill Analysis at 2 (Oh. 2022)
[xx] Id. at 4
[xxi] Gaming Regulations and Statutory Requirements: Ohio, American Gaming Association (last visited Nov. 13, 2022), https://www.americangaming.org/wp-content/uploads/2019/07/AGAGamingRegulatoryFactSheet_Ohio-2022.pdf.
[xxii] Ohio for Responsible Gaming, Ohio Casino Control Comm’n (last visited Nov. 13, 2022) https://casinocontrol.ohio.gov/ResponsibleGambling/EducationandAwareness.aspx.
[xxiii] Mike Seely, Ohio Explores Diversion Court For Problem Gamblers Who Commit Crimes, OhBets (Mar. 2, 2022) https://www.ohbets.com/ohio-explores-diversion-court-problem-gamblers/.
[xxiv] Id.
[xxv] Id.
[xxvi] Sup. R. 36.20(A) (citing Appendix I, Specialized Docket Standards), https://www.supremecourt.ohio.gov/docs/LegalResources/Rules/superintendence/Superintendence.pdf
[xxvii] Scott J. Frederick and Cheryl B. Moss, The Shuffled Deck: Nevada’s Gambling Treatment Diversion Court and Future Expansion of Gambling Courts in the United States, 12:2 UNLV Gaming L.J. 191, 198 (2022)
[xxviii] Brett Collson, Ohio Sports Betting News and Information, The Lines (last visited Nov. 13, 2022), https://www.thelines.com/ohio/.