Ohio Online Casino Bill Proposes Unique Licensing and Tax Structure

Ohio is considering a new online casino bill, but its chances of progressing seem slim. The bill, however, offers some intriguing proposals regarding the expansion of online gambling in the state.

State Sen. Niraj Antani introduced SB 312 this week ahead of the state’s end-of-year lame-duck legislative session. With Antani being term-limited, the bill will lose its sponsor in 2025 if no action is taken before then. The legislation seeks to bring online casinos into the fold of Ohio’s regulated gambling market, albeit with a few noteworthy provisions.

Online Casino Expansion Supervised by OCCC

Under the of the proposed bill, the Ohio Casino Control Commission (OCCC) would be responsible for overseeing the state’s online casino operations. The bill outlines specific licensing requirements, making licenses available only to existing casino operators within the state. This exclusive licensing arrangement could limit new entrants and ensure that current operators retain control over the expanding industry.

A significant financial commitment is expected from operators wishing to participate. The licensing process comes with an initial application fee of at least $100,000.

Once approved, operators would need to pay an annual licensing fee of at least $300,000, as well as a mandatory contribution of $250,000 to a problem gambling fund. These fees mean that any operator hoping to maintain its online casino business would face yearly costs exceeding half a million dollars. This financial burden could restrict the number of smaller operators entering the market, ensuring that only well-established entities remain in play.

One of the most notable aspects of SB 312 is the proposed tax rate for online table games and slot machines. The bill suggests a 15% tax rate for these games, which is lower than the current 20% tax levied on sports betting in Ohio. If ed, Ohio would stand out as the only state where online casino gaming is taxed at a lower rate than sports betting.

This tax proposal could make online casino gaming more appealing to operators, potentially encouraging a quicker expansion of the market.

However, the lower tax rate may raise questions about the state’s fiscal benefits from online gambling. Proponents could argue that a lower tax will attract more operators and, in turn, more revenue overall. Critics, on the other hand, may point to the missed opportunity for higher state income by matching or exceeding the tax rates for sports betting.

Restrictions Raise Eyebrows

Another element of SB 312 that has caught the attention of industry insiders is its strict limitations on s. The bill proposes capping the number of online casino s operating in the state at just five. In contrast, sports betting s must also be licensed, but there is currently no limit on how many can operate within Ohio.

This provision seems particularly unusual, as it would restrict the ability of operators to partner with multiple s. s are typically marketing entities that drive traffic to online casinos and sports betting platforms. By limiting their number, the bill could stifle competition in the market and potentially reduce the effectiveness of marketing efforts to attract players.

Despite its detailed framework, SB 312 is unlikely to advance quickly. Ohio has a long way to go before it is ready to embrace online casinos, and the bill might serve more as a conversation starter than a fast track to legalizing this form of gambling.

Earlier this year, the Study Commission on the Future of Gaming in Ohio published a comprehensive report addressing various forms of gambling, including online casinos, online lottery, horse racing reforms, and sports betting adjustments. The report, totaling over 350 pages, reflects the wide range of issues and interests involved in Ohio’s gambling landscape.

However, no clear recommendations emerged from the commission regarding online casinos or other forms of gambling expansion.

The commission even refrained from drafting a unified letter to Ohio Governor Mike DeWine, opting instead to submit five separate letters outlining different perspectives on the issues at hand.

The lack of a unified vision complicates the path forward for SB 312. With various stakeholders involved in gambling reform, including those interested in horse racing, charitable gaming, and bingo, finding common ground on online casinos will be challenging. The introduction of SB 312 may spark debates, but whether it will lead to concrete legislative action remains to be seen.

While SB 312 presents several innovative ideas for online casino regulation, including a unique tax structure and restrictions, its success hinges on gaining from a divided legislature. State Sen. Antani’s bill will likely ignite discussions among lawmakers, but the prospects for Ohio’s online casino industry remain uncertain.

For now, Ohio remains focused on its broader gambling landscape, and significant changes may still be a few years away.

Source:

”New Ohio iGaming bill proposes tax rate lower than sports betting”, sbcamericas.com, September 06, 2024.