As 2024 draws to a close, Ohio lawmakers are making a significant move towards expanding the state’s gambling landscape. In September 2024, Senator Niraj Antani introduced Senate Bill 312 (SB 312), a bill that could legalize online casinos across the state. If passed, it would allow existing Ohio casinos to offer digital platforms for games like poker, blackjack, and slot machines, bringing the Buckeye State in line with other states that have already embraced online gambling.
The Ohio Casino Control Commission (OCCC), which currently oversees sports betting and retail casino operations, would regulate the online market. The bill’s introduction comes after months of deliberation by Ohio’s Study Commission on the Future of Gaming, which highlighted the potential for online gambling to bring significant revenue to the state. However, with the legislative session ending soon, SB 312 faces an uphill battle to progress before 2025.
Tax Rate Sparks Debate
One of the most controversial elements of SB 312 is its proposed 15% tax on online casino revenue. Comparisons with Ohio’s sports betting tax—recently increased to 20%—have fueled a debate over whether the lower rate would adequately benefit the state. Governor Mike DeWine, who supported the increase in sports betting taxes in 2023, has expressed reservations about the expansion of gambling, especially after the state collected $231 million from sports betting tax revenue following the rate increase.
Proponents of SB 312 argue that the proposed tax rate is competitive with other states, making Ohio an attractive market for operators. For instance, Pennsylvania taxes its online casinos at a hefty 54%, while Michigan’s tax rate stands at 20%. Supporters believe the 15% rate will incentivize major players to invest in Ohio’s online casino industry and help it grow without stifling competition.
Fees and Market Restrictions
In addition to the tax debate, SB 312 outlines strict licensing and fee requirements for potential operators. Casinos looking to enter Ohio’s online market would face a non-refundable $100,000 application fee, followed by an annual $300,000 licensing fee. Additionally, operators would need to contribute $250,000 to Ohio’s problem gambling fund, further emphasizing the state’s commitment to responsible gaming.
SB 312 also limits the number of online casino platforms to five, a move intended to prevent market saturation. While some view this restriction as a necessary measure to protect the industry’s health, others argue that it could limit competition and consumer choice. The Ohio Casino Control Commission would oversee the regulatory aspects, ensuring operators adhere to state guidelines and regulations.
Concerns from the Hospitality Industry
Ohio’s hospitality sector has voiced strong opposition to the potential legalization of online casinos. Many brick-and-mortar casino operators fear that online gambling could pull customers away from physical establishments, leading to revenue loss and job cuts. JACK Entertainment, a Cleveland-based casino operator, has been vocal in its opposition, warning that the move could hurt the local economy.
David Corey, Executive Vice President of the Bowling Centers Association of Ohio, expressed concerns on behalf of the hospitality industry. He warned that online casinos could reduce foot traffic to local businesses that rely on casino-goers. “Our clients are worried that online gambling could have a serious impact on local businesses,” Corey said, reflecting the broader concerns of the hospitality community.
Despite the pushback, Senator Antani has maintained that online casinos would simply provide another entertainment option for Ohioans. “It’s just another way to entertain yourself, like any other game on your phone,” Antani stated, dismissing claims that the introduction of online casinos would hurt retail establishments.
The Path Forward for SB 312
Although SB 312’s introduction marks a critical step toward legalizing online casinos in Ohio, its future remains uncertain. With the legislative session winding down, there is little time left for the bill to make progress in 2024. Senator Antani, who is term-limited and set to leave office in 2025, is eager to push the legislation forward, but it may not gain significant traction until next year.
As SB 312 awaits assignment to a committee, the conversation around online casinos is far from over. Ohio’s lawmakers and industry stakeholders will continue to grapple with the potential economic and social implications of bringing online gambling to the state.