Is Ohio losing out on a windfall of revenue from sports betting?

Published: Nov. 22, 2021 at 9:01 PM EST
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CLEVELAND, Ohio (WOIO) - Could Ohio hit the jackpot if it legalizes sports betting?

Just days away from the big Ohio State-Michigan game, you’ll have to cross state lines if you want to make your bet on a win for the Buckeyes.

19 Investigates found Ohio is losing money to surrounding states.

But a debate is underway that could change that.

19 Investigates found sports betting is already underway in six surrounding states, Pennsylvania, West Virginia, Virginia, Indiana, Michigan, and Illinois.

“We’re taking an activity that was done in the shadows and now states can regulate it, tax it and provide protections,” said Jeff Hoose, regional manager at FanDuel Sportsbook.

He oversees operations at Motor City Casino in Detroit.

“It’s an exciting place to spend an NFL Sunday or a fight night, it’s electric,” he said.

Motor City Casino in Detroit.
Motor City Casino in Detroit.(WOIO)

State bill under debate

Some Ohio state lawmakers are ready to go all in.

They’re proposing up to 40 retail sportsbooks across Ohio, kiosks at shops and restaurants to place wagers, and allowing mobile betting apps.

If House Bill 29 passes, retail sportsbooks in Ohio would have to be in a county with at least 100,000 residents.

Right now it’s waiting for a conference committee to take the next steps.

Hoose said if it’s legalized here, “A significant portion of sports betters in states like Indiana and Michigan are coming from Ohio. That won’t be happening anymore and that money will stay right in Ohio.”

Sports betting in Michigan

19 Investigates made the trip to Detroit, where they have three casinos, to see how it’s going in Michigan.

They launched retail sports betting in March 2020, just as the pandemic hit.

Then started online sports betting this year.

“The first year you see a spike, it’s new, it’s shiny. Let’s go figure out what this is,” said Jay Rising, Chief Financial Officer for the city of Detroit.

We discovered the city of Detroit raked in more than $880,000 from retail sports betting taxes from January through September of this year.

“Well, it goes to our general fund. So it’s important to us to replace those revenues we saw, a real big dip, a quick dip in income tax for Covid,” Rising said.

In total, the state could take in $6-10 million for the year.

Detroit’s share is $2.5 million.

But we found that’s actually a drop in the bucket compared to how much they get from internet gaming as a whole, over $70 million in tax revenue.

“So we’re transitioning on things like internet betting and casino revenues to a tax system for local governments and for states that is a broader base of the economy,” Rising said.

We found the tax money in Detroit is being put to good use and could have a similar impact in Cleveland.

Regulating sports betting

Inside the historic Cadillac Place, the Michigan Gaming Control Board is tracking it all.

“Constantly you see people at the sportsbooks betting,” said Executive Director Henry Williams.

“The handle on internet sports betting has been over $2 billion, at the three commercial casinos, brick and mortar alone has been $200 million,” Williams said.

He said tax revenue isn’t as high with sports betting, at just 8.4%.

But there’s more to it than that.

“They’re going to enjoy the other entertainment, food, drinks, you know the restaurants, the slot machines, the table games,” Williams said.

Online sports betting is exploding.

But if you want to try your hand at it, you have to physically be in a state where it’s legal, like Michigan.

19 Investigates discovered sportsbook hosts are able to geo-tag betters.

“They put a fence around the state basically, to prevent bets coming from outside other states. All the bets have to originate in the state of Michigan,” Williams said.

We asked his advice for states like Ohio considering legalizing sports betting.

“Talk to the agency that’s going to regulate the industry. Get buy-in, find out what they need to regulate it you know. Because they can put many things in there, but if you don’t give us any teeth to regulate it, or the resources to regulate it, it’s going to fail,” Williams said.

JACK Casino in Cleveland.
JACK Casino in Cleveland.(WOIO)

Back in Ohio, we reached out to the Ohio Casino Control Commission.

The agency would be in charge of oversight and licensing for sports betting.

19 Investigates learned if it passes, sports wagers would be taxed at 10% and revenue would go to K-12 education and helping problem gambling.

Across the street from Jack Casino downtown, Clevelanders we spoke with supported legalizing sports betting.

“I think that would be great, I really do. Give people something to do, get the money flowing and it will attract a lot of people here in Cleveland, yeah,” Romeo Maxwell said.

Help for problem gamblers

Sports betting and gambling can be addictive for some people.

Under Ohio law, 2% of the state’s casino tax revenues each year must go to programs for treating or preventing gambling addiction.

The state formed Ohio for Responsible Gambling to help communities reduce problem gambling.

You can learn the common warning signs on their website.

Get Set Before You Bet helps gamblers set limits and recognize the risks.

If you or a loved one has a gambling problem, you can call the Ohio Problem Gambling Helpline 24/7 at 1-800-589-9966 .

The Ohio Casino Control Commission also has a list of resources for responsible gaming.

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