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Buckeye Betting: The changes coming to casinos, stadiums and bars trying to get a piece of the action

Ohioans can begin placing legalized wagers on the Browns, other professional sports and college teams beginning January 1.

CLEVELAND — After three years of testimony from casino lobbyists, pro sports executives and bar owners, Ohio is finally getting into the game.

With the passage of House Bill 29 last December, Ohio joins 35 states that have legalized sports betting, including Michigan, Pennsylvania and West Virginia. But the Buckeye state’s betting options are the most expansive in the country.

Wagers can be placed on mobile devices, in person at casinos, racinos, some arenas and stadiums -- and on kiosks at potentially thousands of bars.

Gamblers and gaming interests were hoping Ohio would launch its betting options by football season. But the state just announced the start date is Jan. 1st. The law requires Ohio be ready on New Year’s Day or earlier.  

The Ohio Casino Control Commission is writing the bulk of the rules and handing out the limited number of betting licenses.

More than 90 percent of bets are expected to be placed through online and mobile betting sites, also known as sportsbooks, such as FanDuel and Draft Kings.

Ohio’s law caps the number of mobile sportsbook licenses at 25. These are known as "Type A" proprietors.

Casinos, racinos and sports teams can partner with online sportsbooks and take in-person wagers at betting windows.

Ohio’s law will allow 40 locations around the state to offer betting windows. These are referred to as the brick-and-mortar sportsbooks, or "Type B" proprietors.

JACK Casino, the only Ohio-based gaming company, is playing both sides of the coin, offering window-betting and its own mobile sportsbook.

“Most folks think about sports books and they think about Las Vegas these massive sports books, and ours will be very similar to that,” Adam Suliman, JACK Entertainment’s VP of sports and digital gaming, said. “We call it a Vegas-light approach. So, it's not going to be quite the same scale as a mega book in Las Vegas, but it should have the same excitement and fun.”

Suliman said the casino is adding large TVs and sports windows to its first floor.

JACK Casino already lets adults place practice bets through their phones.

“We recently launched a betJack training Camp mobile application that allows folks to practice sports betting between now and the time that we go live for real money,” Suliman said.

He isn’t bothered by the Casino Control Commission’s timeline.

“I think the regulator is appropriately taking their time to set a framework that allows the industry to get off on the right foot,“ he said.

The Ohio Lottery Commission is overseeing sports betting in bars, which will take place on self-serve kiosks similar to Keno machines.

The lottery commission’s role is to line up vendors to provide the gaming kiosks and oversee their operations. The Ohio Casino Control Commission will grant up to 20 licenses – known as "Type C"  proprietors – to kiosk vendors who can place kiosks in an unlimited number of bars. (The lottery commission has about 2,200 retailers who could qualify to host betting kiosks.)

Bar owners and their trade groups are complaining the lottery commission is moving too slow and is a reluctant advocate for more than two betting kiosks per bar.

The gaming law does not include a clear restriction on the number of betting kiosks, though it says no host shall have more than two self-service terminals unless approved by the lottery commission.

“We are deeply concerned related to the timing of the Ohio Lottery," says David George, president of the Ohio Fair Gaming Coalition, a nonprofit representing small businesses in the gaming landscape. “We're watching the Ohio Casino Control Commission move along at a rapid pace, at a very thorough pace related to their constituents in the mobile world and in the Class B licenses.”

The Lottery Commission wouldn’t agree to an interview to discuss such complaints or its role. The lottery commission said in emails that it is only 30 days behind the Casino Control Commission, which first needed to lay groundwork. (You can read the lottery's responses below this article.)

Bars and bowling allies were left out of early versions of the gaming bill and have been fighting for a small piece of the action ever since. During testimony last year, one casino representative testified that allowing bars to accept bets would be equal to making them unregulated casinos. The final bill allows bars to take small bets through kiosks.

George worries the bars are still not getting proper attention.

“The intent all along was never to turn every bar in Ohio into a sportsbook,” he said. “The General Assembly heard us. Gov. Mike DeWine and [Lt. Gov.] Jon Husted heard us. We were trying to keep butts in the seats. It's all about trying to get people to stay a little longer, have an extra cheeseburger, have another Bud Light, watch the entire game. If it doesn't occur according to the way the legislation was written, we're just further creating an even more unlevel playing field, which is what our organization is here to fight against.”

Here’s are the lottery commissions responses to 3News questions.

Q: Does the lottery commission have a say in how many sports betting kiosks a bar can offer?  Though the sports betting bill did not include a clear restriction on the number of betting kiosks, the lottery commission’s rules released so far state: “Unless otherwise approved by the director, no Type C sports gaming host shall have more than two self-service terminals operational at the licensed facility.”  Does this mean lottery commission is open to allowing more than two? And under what circumstances?  

 A: Based on the language in House Bill 29, the terminals are limited to 2 per location, but the proprietor can request to increase it with the approval of the OCCC/Lottery. The Lottery Commission’s proposed rule would allow the Lottery to consider allowing more than two terminals as long as it is beneficial to the program and does not undermine the integrity of sports gaming in the state. 

The specific language limiting terminals may be found at ORC 3770.25 (B)(1). 

 Q: The lottery commission is not providing (through its vendor) or managing sports betting kiosks to bars like it does Keno machines, so why not leave the number of machines up to the licensed sports kiosk vendor and the bar?  

A:HB 29 authorizes the Casino Control Commission to license up to 20 proprietors. Each proprietor’s kiosks must comply with the Casino Control Commission and Lottery Commission rules. As above, language limiting machines is at ORC 3770.25 (B)(1) but gives the proprietors (vendors) the ability to request additional kiosks. 

 Q: Do you see sports betting kiosks competing with your other products, such as Keno?  While the lottery commission will make money from sports betting, does the lottery commission see this as having a potentially negative impact on overall lottery sales – especially if people spend money on non-lottery related sports betting options? What’s your analysis say? 

 A: The Lottery’s mission is to maximize profits for education. When a new gaming product is introduced, it is competition for our existing lottery products and there is potential for cannibalization. Discretionary income is exactly that; spending money on sports gaming reduces the amount a consumer can spend on other entertainment. 

 Q: Bar owners and their trade groups complained the lottery commission’s pace of rules writing and responsiveness is too slow. They say the Ohio Casino Control Commission is better preparing type A- and B- related business/proprietors/books for key upcoming deadlines. Please describe your view of the lottery commission’s timeline for writing rules. And respond to their complaint?    

 A: The Ohio Lottery Commission is responsible for regulating the Type-C hosts and proprietors.  

We appreciate feedback from stakeholders, however the responsibility for drafting rules rests first with the Casino Control Commission.   

Per the legislation at Sec. 3770.24. (A) The state lottery commission shall operate lottery sports gaming as part of the statewide lottery in accordance with this section and with Chapter 3775. of the Revised Code. The state lottery commission may adopt rules under Chapter 119. of the Revised Code, in consultation with the Ohio casino control commission, to implement sections 3770.23 to3770.25 of the Revised Code, so long as those rules are not in conflict with the rules of the Ohio casino control commission. 

The only way for the Lottery to ensure that our rules did not conflict is if casino control went first.  We are less than 30 days behind them in the rules making processes.    

As stated in ORC 3770.25 (B) (6) The rules of the Ohio casino control commission and the state lottery commission concerning lottery sports gaming shall apply identically in all applicable respects to lottery sports gaming offered on a self-service terminal and to lottery sports gaming offered on a clerk-operated terminal. 

We have set up an email and specific webpage for interest parties to go to in order to see the latest updates.  If the public has specific questions or want to be stay updated when new information is posted, they can email requests to sportsgaming@lottery.ohio.gov.  

 Q: The lottery provides integrity now for its games – Pick 3, Keno etc. -- by ensuring that players, bars and the state all get paid without problems. The new gaming law leaves most of that to the bar, kiosk vendor and casino commission. Describe the lottery commission’s role in providing oversight? In other words, what oversight does the lottery really provide as it relates to the transactions? 

 A: The Lottery’s business is built on integrity and adding sports betting to the portfolio doesn’t change that. Since 1974, the Lottery has paid out $52 billion in prizes and contributed over $29 billion to education in Ohio.  

HB 29 allows the Casino Control Commission to license up to 20 Type C proprietors and mandates that the Lottery contract with proprietors to offer sports gaming at licensed hosts. Ensuring that players and the state get paid is crucial to the integrity of the program. 

Lottery sports gaming regulators will reconcile financial transactions and prepare invoices to collect the state’s share of the revenue and oversee (regulate) the required technical components including equipment certification standards, monitoring and integrity standards, and minimum internal control standards and ensure compliance with Casino Control Commission and Lottery Commission rules.     

 Q: Bars and trade groups also raise another concern, true or not: Big restaurant chains will attract a sports betting kiosk vendor but the smaller bars, which won’t generate as many bets, might be left out. How will the lottery ensure that small bars are not left out?  

 A: While the bill does not give the Lottery the ability to mandate which hosts the proprietors contract with, our goal continues to be to help hosts and proprietors find each other. We’re posting the list of interested and prequalified hosts on our website to help potential proprietors know who is interested. The legislation set forth a free market, therefore the Lottery doesn’t have any influence over a proprietor’s business decisions.

 Q: What is the lottery required to do or not do under the new law?

A:The Lottery is required to operate Lottery sports gaming at qualified retailers (D1, D2, or D5 liquor permit) and we’re mandated to contract with the type C sports gaming proprietors licensed by the Ohio Casino Control Commission. Interested Lottery retailers must be licensed by the Casino Control Commission and obtain a recommendation from the Lottery. 

 The legislation allows the Lottery to work collaboratively with the Ohio Casino Control Commission (OCCC) to develop the rules, standards, and operating procedures for the type C sports gaming program. All profits from type C sports gaming are for the benefit of the Lottery Profits Education Fund by the legislation. 

Q:Does the law require the lottery to oversee the small betting kiosks in bars, restaurants and other venues?

A: Yes.

Q: What exactly does the lottery have to do?

A: The Lottery will oversee the full operation of lottery sports gaming at licensed type C host locations. This includes but is not limited to ensuring type C proprietors are in compliance with minimum internal controls for the sports gaming systems, responsible gambling messaging, advertising standards, and customer service standards 

Q: What rules does it have to establish?

A: To date, the Lottery has issued three batches of rules related to type C hosts, type C proprietors, and updates to the Ohio Voluntary Exclusion Program (VEP). The final batch of rules will be issued for public comment early next week. These rules, which have been presented and discussed at multiple stakeholder meetings, are complementary to those issued by the OCCC. A stakeholder meeting will be held specifically for prospective type C proprietors on May 16.

Q: What is it overseeing?

A: See response 1.

Q: What role will the lottery play in offering kiosks for sports betting? Will these have to come through the lottery’s current vendor Intralot?

A: HB 29 allows the Ohio Casino Control Commission to license up to 20 Type C proprietors to offer lottery sports gaming at licensed Hosts.

A Type C Lottery Sports Gaming Proprietor will be required to offer a full-service retail solution including maintaining equipment. Proprietors will be required to comply with the technical components including equipment certification standards; monitoring and integrity standards; and minimum internal control standards.

The Lottery is accepting information from interested vendors including the current lottery vendor. However, until the Ohio Casino Control Commission licenses the Proprietors, and the Proprietors propose a solution for approval, the question on the use of current lottery equipment cannot be answered with certainty. Therefore, at this time, it is unknown whether current equipment will meet the standards mentioned above.

Q: What exactly is the lottery’s role in oversight?

A: See previous question

Q: What role does it have in collecting and managing the wins, the bets and taxes for the state?

A: Proprietors will be expected to manage wagers and liabilities with oversight by the Lottery.

Sports gaming regulators will reconcile financial transactions and prepare invoices to collect the state’s share of the revenue directed to the Lottery Profits Education Fund.

Q: How much money does the lottery anticipate making?

Overall, the Ohio market has been estimated by the Legislative Budget Office to generate $74 million in gross gaming revenue in year one. At a 10% tax rate, the state share overall from in-venue, mobile, and lottery would be $7.4 million. As the application process opens we will have a better understanding of the market size and what it might bear. 

Q: Who covers the bets placed on kiosks overseen by the lottery?

A: The proprietors cover bets placed on kiosks overseen by the lottery and be in compliance with Ohio Administrative Code 3770:3-7-01 and 3775:16-06.

Q: How many betting kiosks does the lottery envision around the state? Early legislation proposals wanted a small cap that was expanded to include potentially anyone with liquor license?

A: We are beginning the stakeholder process now to identify interest, but we believe approximately 2,000 lottery retailers hold the class D1, D2, or D5 liquor permit and may be eligible. The legislation authorizes up to 2 kiosks per location. 

Q: How does sports betting impact or influence the lottery’s interest in mobile lottery games?

A: The launch of the sports betting program does not affect our desire to meet our players where they are.  

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