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Ohio lawmakers crafting sports betting bill as lobbyists compete for control of wagering business

Casinos and racinos want to run all wagering as bars and bowling centers push for a small piece of action through Ohio Lottery kiosks.

OHIO, USA — The NFL draft isn’t the only big sports story in town.

With sports betting already legal in half the states, lawmakers here are considering legislation to allow Ohioans to place bets on Browns, Cavs and Indians games – and other sporting events. Proposals include allowing such wagering at Ohio casinos and racetracks, possibly bars, and even your phone.

But teams of lobbyists are battling over who should control sports betting, which some worry could short small businesses.

“Ohio is at the cusp of catching up with its neighbors by legalizing sports wagering and providing them with a regulated and safe alternative what will move them away from the black market,” Rick Limardo, Vice President of Government Affairs for MGM Resorts, recently testified before the Ohio Senate Select Committee on Gaming.

RELATED: Ohio's professional sports teams want in on legalized sports betting

Legal sports betting in the U.S. is a $13 billion business, alive in neighboring Pennsylvania, West Virginia, Indiana and Michigan. States, including Ohio, have been considering how to allow regulated gambling since the U.S. Supreme Court ruled in 2018 that states have the right to regulate betting.

Ohio lawmakers want to keep sports bets – and related tax revenue – in state and have been holding hearings for months on how to do it.

 Professional sports teams, including the Cleveland Cavaliers, endorse regulated betting and want the to license official league data and real-time game statistics to betting services.

“We are the very entities that are creating the legalized sports-betting market,” Len Komoroski, CEO of the Cavaliers, recently testified.

 But like sports itself, influencing legislation is game between perennial powerhouses and underdogs. The winner will get control of millions of dollars.

“It is critical that the operation of retail and mobile sports betting be limited to existing licensed gaming operators, who have invested billions in economic development in Ohio,” Eric Schippers, Senior Vice President of Penn National Gaming, testified recently.

Casino operators, which have a monopoly in Ohio on table games and slot machines, want to control it all. Some of them and other big gaming companies also own the state’s seven horse racing tracks that feature slot machines operated by the Ohio Lottery Commission.

But taverns, bars and bowling centers want a piece of the action, perhaps through bar kiosks similar to the lottery commission’s Keno machines they already offer.

“We can’t let local homegrown businesses once again get shut out by greedy casino and racinos owners,” David Corey, Executive Vice President of the Bowling Centers Association of Ohio, complained during a recent news conference organized by the Ohio Fair Gaming Coalition.

He said casino owners haven’t lived up to their economic promises, pointing to the never built phase two of the Cleveland casino. And he noted that casinos, racinos and the lottery commission have fared better during the pandemic than bars and taverns, so they can’t cry poor as a reason to be allowed to control all sports wagering.  

“These guys just can’t stop lying,” Corey charged. “They need a boost? Bowling centers and hospitality centers need a boost. And this can really help. All we are really asking for is 5 percent– that’s why this seems so ludicrous.”

Big gaming companies argue they should control betting because they are already heavily regulated and have partnerships with online betting services – through which they predict 90 to 95 percent of all wagers will be placed. Schippers testified that Penn National Gaming has a partnership with Barstool Sports that has proven elsewhere to be well-managed and to spur economic growth in and around its casino properties.

But Penn National Gaming and other casino operators oppose bars and others getting any piece of gaming – either in person or through their own online partnerships.

“The free market can have a role but not by deputizing them into casino or sports betting business,” he testified.

John Lane, co-owner of the chain of Winking Lizard Tavern sports bars, is hoping for a compromise and to partner with casinos with established ties to online betting services.

“The law’s got to allow us to get a piece somehow,” he said, holding up his cell phone. “We all know that through this thing, this mini-computer is where people like to bet. So, we partner with a casino and get a tiny piece, whether it’s incentivizing our guests to come in and gamble.”

Lobbyists also are battling over who should regulate betting. Big gaming interests want the Casino Control Commission in charge.

Small businesses say they have a better shot at getting a piece -- if lawmakers put wagering in the hands of the lottery commission — which already works with them.

Jeremy Cottrell, owner of Yorktown Lanes in Parma Heights, says his family’s 60 years in business demonstrates it can manage sports betting.

“The fact that we have successfully and responsibly run Keno that having sports betting, we’ve proven we can do that as well,” Cottrell said. “With the nature of sports betting, coming into a bar to watch a game, you want to place a bet, we are a perfect match, and the kiosk is the way to go.”

Complicating the whole issue -- and worrying bars, bowling allies and especially convenient stores -- is the Ohio Lottery’s interest in offering lottery tickets and games on the phone. Small businesses say this will kill their foot traffic and related spending – and open the door to mobile sports betting through the lottery commission.

In 2019, the lottery commission proposed offering “iLottery” mobile games as a way to increase its profits, which are funneled to education. The lottery commission, which is run out of Cleveland by an independent board but one that traditionally listens closely to the governor’s office, picked its current lottery vendor, NeoPollard Interactive, to offer mobile games. (The lottery commission has said the vendor was picked through a competitive process.)

But the state’s Controlling Board – which includes lawmakers -- has to sign off on such contracts. It blocked the deal for now. Among the issues holding the deal up is evolving gaming legislation and a concern that convenient stores and small business would be hurt by the potential loss of foot traffic. Store owners widely believe people will stop visiting their stores if they can buy lottery tickets through their phone.

It’s unclear if lawmakers will include mobile lottery games -- and its potential to enter the sports betting market – in its final gaming bill.

But odds are good some version of a gaming bill is going to pass this summer.

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