Ohio Passes Sports Betting Bill: Governor Expected to Sign Soon
Ohio passed the sports betting bill on 12/8, and the Governor is expected to sign it within the next 10 days. While a clean version of the bill isn’t available yet, we do have docs showing all the amendments that were adopted and a summary document. The formatting of the amendment doc makes it difficult to understand how the amendments fit into the base bill, but our team is going through and piecing it together.
There will be 25 Type A licenses (sports gaming proprietor/Master License). 21 are designated for sports teams (10) and casinos / racinos (11). The other 4 are unassigned, but require an Ohio-based business to be eligible. For instance, an entity like the Hall of Fame Village in Canton, OH is reportedly positioning themselves for one of the 4 licenses.
Only sports teams and casinos/racinos that are Master Licensees are eligible to contract with two mobile managed services providers (MMSP); otherwise known as a skin. The Hall of Fame Village (as an example) could only have 1 mobile partner.
The caveat is that the 2nd skin can only be used “if the sports gaming proprietor demonstrates to the Ohio casino control commission that the second contract would generate an incremental economic benefit to this state beyond the economic benefits generated by the first contract and that the second contract will not prevent another type A sports gaming proprietor from securing a contract with a mobile management services provider.” I think this threshold can be easily met, but it will be important to see the full bill to see if there are other impediments.
There is also a provision that says the Commission could expand 25 Type A licenses, but again there are caveats. From the amendment: “When twenty-five type A sports gaming proprietors are licensed in this state, the commission may issue additional type A sports gaming proprietor licenses to eligible applicants who demonstrate to the commission that the sports gaming market in this state needs additional type A sports gaming proprietors.” It is also unclear whether those 25 would need to utilize their skins before the Commission would consider expansion. We need to understand this better, but it seems that making the case to justify additional Type A licenses may be difficult.
They really outdid themselves in making the costs for licenses as confusing as possible. The term for initial license and the renewal period is 5 years. Here is how I have broken it down:
Type A (Pro Sports Team)
$1M initial if you offer 1 skin and a $1M renewal
$3.33M initial if you choose to offer 2 skins and a $1M renewal
MMSP (partnered with Pro Sports Team)
1st Skin = $2M initial and $2M renewal
2nd Skin = 6.66M initial and $2M renewal
Type A (Casino / Racino)
$1.5M initial if you offer 1 skin and a $1.5M renewal
$5M initial if you offer a 2nd skin and a $1.5M renewal
MMSP (partnered with Casino / Racino)
1st Skin = $1.5M initial and $1.5M renewal
2nd Skin = $5M initial and $1.5M renewal
Other Type A (one of remaining 4 licenses)
$1.5M initial for 1 skin and a $1.5M renewal
MMSP (partnered with Other Type A)
1st Skin = $1.5M initial and $1.5M renewal
Other key items:
- The tax rate is set at 10%.
- They removed any requirements for use of “official league data.”
- Gaming Control Commission must set a launch date, which has to be before Jan 1, 2023
Our team has been reviewing the amendments that were included and we believe their will be a need to push for some technical correction during the 2022 legislative session and in advance of market launch.
iDEA is prepared to engage with the Ohio Casino Control Commission during the regulatory process and is also evaluating what legislative “fixes” to pursue in 2022