COLUMBUS — The stage is set for a battle over how to regulate sports betting in Ohio, with the House proposing a system run by the Ohio Lottery Commission and the Senate preferring to let the Ohio Casino Control Commission handle the latest gambling expansion.
A bipartisan House bill introduced Tuesday would place sports betting under the Lottery Commission, meaning state revenue - estimated at $30 million annually - would be earmarked for K-12 education, similar to what is currently done with lottery profits.
The proposal would require a $100,000 fee, plus an annual renewal fee, on each casino and racino, while fraternal and veterans organizations would pay an annual $1,000 fee. It also would impose a 10 percent tax on all sports gaming. Additional locations could offer sports betting once the courts and federal government work out sports betting via online and mobile devices.
The bill “provides clarity as to the authority overseeing sport betting in Ohio while providing flexibility to address opportunities and challenges facing this newly legalized industry,” said Rep. Dave Greenspan, R-Westlake, who is sponsoring the bill with Rep. Brigid Kelly, D-Cincinnati.
The bill would create an 11-member Sports Gaming Advisory Board to recommend sports betting regulations to the Lottery Commission for three years. Meanwhile, the commission would expand from nine to 11 members, with at least three having knowledge of and experience in sports gaming.
Sports betting was legalized nationwide nearly one year ago in a ruling by the U.S. Supreme Court.
But a bipartisan Senate bill introduced in March would instead allow the Ohio Casino Control Commission to regulate sports betting, which sponsor Sen. John Eklund, R-Chardon, says is a better fit.
“I cannot envision a single advantage that the Lottery Commission has in regulating sports gaming that the Casino Commission doesn’t have,” Eklund said. “I think there is a palpable difference between the games that the Lottery Commission is responsible for now and something like sports gaming. I think sports gaming is on a significantly more sophisticated level.”
Eklund also said the House bill would create new bureaucracy, and “could wind up with the sports gaming tail wagging the sports gaming dog.”
Under Eklund’s Senate Bill 111, jointly sponsored by Sen. Sean O’Brien, D-Campbell, casinos and racinos would pay an initial $10,000 fee, plus $100,000 every five years after. Operators would pay a 6.25 percent tax to the state on gross income from the wagers.
Under the House proposal, the Casino Control Commission, at the direction of the Lottery Commission, would regulate and investigate those engaging in sports wagering.
Greenspan pointed to an analysis by the nonpartisan Legislative Service Commission that says that while the Constitution generally prohibits gambling, and Ohio’s gambling law would prohibit sports betting as an illegal scheme of chance, neither prohibits the Lottery from running sports betting. The Lottery Commission currently oversees racino operations.
“The only thing the Casino Control Commission is allowed to do is slots and table games,” Greenspan said. “My belief is the Lottery has a strong standing to offer sports wagering.”
Gov. Mike DeWine said he has not decided whether it would best be handled by the Casino Control Commission or the Lottery Commission. “This needs to play out a little bit in the legislature … This needs to be done right.”
Senate President Larry Obhof, R-Medina, has questioned whether the legislature has the ability to legalize sports betting, arguing a constitutional amendment on the statewide ballot could be preferred.
Reps. Bob Cupp, R-Lima, and John Patterson, D-Jefferson, who crafted a new school-funding formula that would require an additional $1.1 billion over the next two years, backed the House proposal.
The lottery has transferred more than $2.1 billion in profits to education over the past two years.
“I like the idea of putting it into the Lottery rather than casinos because the proceeds would then go toward a real public benefit,” Cupp said.
It’s not ideal revenue, Patterson said, “but given the realities, I welcome this legislation as another alternative to fairly fund our schools.”