Governor Mike DeWine Signs Ohio Sports Betting into Law

Ohio became the 33rd state in the U.S. to legalize sports betting on Dec. 22. Though it is officially legal in the state, Ohio gamblers won’t be able to place their bets in the state until much later.

The long-awaited legislation was signed into legality once Ohio Governor Mike DeWine put pen to paper on House Bill 29 on Tuesday night. In essence, it allows casinos, sports stadiums, bars, restaurants, and other establishments to apply for gambling licenses, to be approved and monitored by the Ohio Casino Control Commission (OCCC).

Now that the bill has been signed, the OCCC has to determine its conditions and regulations before an Ohioan can make their first bet. The bill has the deadline set for the first day of 2023, but lawmakers believe that it will come about six months early and betters will be placing wagers midway through 2022, depending on the OCCC’s timeline.

The caveat that came with the acceptance and authorization of this bill is that the gross revenue from sports gambling in Ohio will be subject to a 10% tax. 98% of the tax revenue will be used to support K-12 education programs in Ohio through a fund called the Sports Gaming Profits Education Fund (SGPEF).

Types of Sports Betting Licenses

There are three different types of licenses that businesses and establishments will be allowed to apply for. All of them are good for five years, once approved.

  • Type A License: online and mobile sports betting licenses will be made available to casinos, racinos, and sports teams in Ohio. A Type A license can cost them up to $2.5 million. Should they decide to contract mobile sports betting vendors in their establishment, they will be allowed a maximum of two vendors. The first one will cost them an additional $3 million and the second one would cost them $10 million but is limited to only those establishments that demonstrate some sort of “economic benefit” for Ohio and will be decided by the OCCC.
  • Type B License: The OCCC will approve 40 Type B licenses for brick-and-mortar stores in the state of Ohio. These licenses will cost anywhere between $90,000 and $140,000. Cuyahoga, Franklin, and Hamilton counties will be allowed up to five of these in their respective boundaries. Summit and Montgomery counties can have up to three.
  • Type C License: 20 self-service or clerk-operated lottery terminals will be approved by the OCCC for use at restaurants and bars. These terminals will be limited to spread wagers, over/under wagers, moneyline wagers, and parlay wagers that are not based on more than four components. They will only cost the establishment around $1,000 to implement.

Ohio Market Size

Ohio is the fourth-largest state to legalize sports betting, behind just New YorkPennsylvania, and Illinois. According to the Fiscal Note and Local Impact Statement provided by the Legislative Budget Office (LBO) of the Ohio Legislative Service Commission, there is a sound market for it.

“At the outset of legal sports wagering in Ohio, LBO assumes a market of about $1.1 billion in FY 2023 and $3.1 billion in FY 2024, assuming the sports gaming program becomes operational in January 2023.” At the 10% tax rate, this would provide the state of Ohio with around $7 million in 2023 and $24 million in 2024, if their calculations pan out. At that rate, $6.86 million would make its way to SGPEF in 2023 and $23.52 million in 2024.