Complex legislation approved in Ohio last week completes a banner year of expansion in U.S. sports betting and underscores several policy trends that are evolving the market.
Pending the expected signature of Governor Mike DeWine, Ohio House Bill 29 will authorize at least 25 online sportsbook platforms alongside retail sports wagering at casinos, sports arenas, bars and restaurants, to establish a market worth up to $872m in annual revenue at maturity per VIXIO GamblingCompliance forecasts.
Last week’s legislative breakthrough after three years of discussions means Ohio is set to become the tenth state to enact sports-betting legislation in 2021, following South Dakota, Wyoming, Arizona, New York (for mobile), Maryland, Florida, Connecticut, Nebraska and Louisiana.
In comparison, just two states approved final legislation in 2020 versus nine in 2019, as momentum was recaptured this year after the pandemic forced lawmakers in various states to put ripening debates on sports betting on pause for several months.
“There was this pent-up demand for it [sports-betting legislation], and that's what we've seen in 2021,” said Scott Ward, government affairs partner at Orrick, which represents leading operators FanDuel, DraftKings and BetMGM, as well as several major U.S. sports leagues.
Roles For Sports Teams, Retail Locations
As well as putting the exclamation point on the year in terms of market expansion, the specifics of Ohio’s legislation underscore several broader policy trends that have become evident in 2021.
Initial bills introduced in the Ohio Senate in 2018 and 2019 would have replicated the New Jersey framework by authorizing sports wagering exclusively through licensed casinos and racinos, which could then contract with online partners as their skins.
The final product passed last week also allows for sportsbooks at the home arenas of Ohio’s eight major league sports teams, PGA Tour golf course and NASCAR track, akin to legislation passed earlier in 2021 in Arizona and Maryland.
As in Arizona’s landmark model, the ten qualified sports entities would control market access for online sports betting by appointing a “designee” company to operate sports wagering on their behalf.
Mobile operators would not necessarily have to be a skin of an incumbent Ohio casino or sports facility, with Ohio following Maryland and New York by partially decoupling mobile and retail licenses and making at least four so-called Type A online licenses available to other companies provided they have employees in the state.
Up to 19 additional retail sportsbook licenses are also available to Ohio businesses subject to limits in each county, again comparable to Maryland.
There will also be a significant role for licensed Ohio bars and restaurants, which will be eligible to host kiosks offering limited sports betting that will be run by at least two licensed network operators on behalf of the Ohio Lottery.
A sports-betting bill enacted in Louisiana similarly enables the state lottery to deploy a network of kiosks at bars and restaurants that were hard-hit by COVID-19.
Another 2021 policy trend reflected in Ohio’s legislation is participation by minority groups, with an official study required on whether racial or gender minorities are disadvantaged and potential licensing goals established if that proves to be the case. Similar provisions were included in bills passed this year in Maryland and Virginia.
The shape of Ohio’s bill reflects the increasingly diverse set of stakeholders at the table in the Buckeye State and beyond, said Orrick’s Ward.
Not that Ohio copied and pasted from other state frameworks, however, as lawmakers crafted their own language based on input from sports teams, lottery providers, bar- and restaurant-owners, and others.
In a statement welcoming the passage of sports betting, Republican state Senate President Matt Huffman described the final bill as “a hard fought, complex effort to make sure this opportunity was accessible across multiple platforms, and not exclusive to a single set of wealthy operators.”
“It’s these same themes from other states, that came together in a way that was unique to Ohio,” Ward told VIXIO GamblingCompliance.
Where Next In 2022?
Heading into the new year, there is little sign of diminishing momentum for market expansion in U.S. sports betting — even though internet gaming remains a more frustrating endeavor.
The likes of Massachusetts, Kansas, Missouri, Maine and Alabama will resume discussions on pending legislative proposals as their sessions resume in early 2022, while North Carolina and Mississippi will look at augmenting their retail-only markets with mobile sports betting.
States dominated by tribal-gaming interests such as Minnesota and Wisconsin could also witness major lobbying efforts for the first time next year, following successful initiatives in Arizona and Connecticut in 2021.
As things stand, 33 states including the District of Columbia have authorized sports wagering, with that number expected to reach 41-46 states by 2025, according to VIXIO GamblingCompliance’s U.S. Sports Betting & iGaming Data Dashboard.
The expanding network of stakeholders means states will continue to diverge on the specifics of legislation and policy fights are inevitable, said David Rebuck, director of New Jersey’s Division of Gaming Enforcement.
But the lesson learned since the U.S. Supreme Court’s landmark ruling of May 2018 is that legal sports betting is overwhelmingly popular and lawmakers are reluctant to ultimately stand in its way, Rebuck said at this month’s SBC Summit North America.
“Policymakers are not opposed to sports wagering so much that they will hold out to the bitter end,” Rebuck said.