Tempted by the prospect of generating some US$650 million (£500m) in additional annual tax revenues, Ohio is seriously considering becoming the eighth U.S. state to legalise 360 iGaming.
If so it would kick-start the hitherto moribund move to full-on digital gaming in the nation, where the only recent adoptee to 360 iGaming was little Rhode Island, way back in June last year.
Since the 2018 repeal of the 1992 Professional and Amateur Sports Protection Act (PASPA)–and subsequent liberalisation of gambling in the nation–, online sports betting has taken off big time and is now legal in some 27 of the American states.
But iCasino and iLottery appear to be stuck in a rut.
Now an Ohio Study Commission on the “Future of Gaming” recommends legalising online casinos and iLottery to bring “net benefits” to the state.
In February, the Ohio General Assembly established the Study Commission on the Future of Gaming.
The Commission, composed of seven Representatives, met four times to discuss the state’s sports betting, lottery, casino, and horse racing sectors.
Concerns
This month (July 12) they published their findings and official recommendations in a 354-page report.
The study, which began with a letter from Commission Representatives Jay Edwards, Jeff LaRe, and Cindy Abrams, summarised the key takeaways and advocated the legalisation of iGaming and iLottery in the Buckeye State, population 11.8 million people.
The letter addressed concerns from the land-based industry regarding customer cannibalisation, stating that, based on evidence from other states, legalising online casinos and iLottery would lead to “net benefits” for the state.
According to the report, Pennsylvania, which legalised iLottery in 2018, saw a 20 percent increase in physical ticket sales and Kentucky, which legalised iLottery in 2017, saw a 56 percent uptick in physical sales.
It also cited the 44.7 percent increase in Connecticut’s gambling market since the launch of iGaming in October 2021 and Michigan’s success in becoming the “largest online gaming market in the United States”.
The study attributed the physical sales increase to: “More people participating in the market on their phones and becoming more comfortable/knowledgeable about doing it at a physical location.”
Taxes
This challenges the argument that legalising online gambling equates to less business for land-based establishments and suggests greater convergence between the two sectors than previously thought.
The overall conclusions were that the state should move ahead, legalising both activities, but sustainably and safely: “While the state should proceed with caution and care with any expansion of this magnitude, with the right regulatory framework, these types of gaming can thrive with nominal impact to our current system.”
And the report also cautioned against imposing “premature” tax hikes on online gambling; which could also be interpreted as a warning to other states.
For example, Ohio’s own online sports betting tax increase (lawmakers doubled the rate from 10 percent up to 20 percent six months after the market launch) was itself “premature”, noted the report.
And it hampered growth for the companies who had already invested millions “into kickstarting the industry in Ohio…and…made other companies think twice about coming to Ohio to invest”.
Industry watchers say this should serve as a stark warning to other states who are considering gambling tax hikes — especially Illinois, which this month increased operator levies from a flat rate of 15 percent to a sliding scale maxing at an eye-watering 40 percent.
