Ohio Nears Legal Sports Betting, Eilers & Krejcik Forecasts Market North of $600M

Posted on: September 18, 2020, 09:56h. 

Last updated on: September 18, 2020, 11:25h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Ohio lawmakers could sign off on sports wagering before the end of this year, and market observers are already enthusiastic about how the Buckeye State betting scene is shaping up.

OSU Buckeyes
With sports betting legislation moving along in Ohio, residents may be able to bet on their beloved Buckeyes if the team makes a major bowl game. (Image: USA Today)

Research firm Eilers & Krejcik Gaming points out Ohio will have low taxes on sports betting, will allow multiple skins, and is home to a devoted sports fan base — traits that could allow the state to become one of the meccas of Midwest sports wagering.

Ohio is contemplating an 8% tax on revenue. That rate, which is lower than any other operational state of its size, should result in one of the country’s most aggressive advertising and promotional environments,” said Eilers & Krejcik in the most recent edition of its bi-weekly EKG Line report.

Home to 11.54 million residents, Ohio is the seventh-largest state. Assuming the eight percent tax on sports wagering turnover is passed, that would be far lower than what’s levied in states of similar size, several of which are close to the Buckeye State.

For example, the bottom tax rate on sports betting in Illinois is 15 percent. Ohio’s proposal would also be slightly below Michigan’s 8.4 percent clip. Neighboring Pennsylvania has a 36 percent levy on sports wagering gross gaming revenue (GGR).

Big Opportunity Awaits

Industry observers and professional bettors are excited about the Ohio market for another reason: sports wagering there will be regulated by the Casino Control Commission (OCCC), not the lottery. Some states with lottery-controlled sports wagering are posting disappointing numbers because gamblers are getting wise to what are, in many cases, punitive odds.

Additionally, the Buckeye State could offer bettors plenty of choices. There are 11 casinos and racinos in the state, and each could have up to three sports wagering skins, with as many as 14 already spoken for, according to Eilers & Krejcik. Well-known operators of land-based casinos in the state include Caesars Entertainment, MGM Resorts International, and Penn National Gaming.

Low taxes, multiple skins, and rabid fans could be a boon for online operators in Ohio, potentially yielding a “hypercompetitive online sports betting market that we estimate will generate GGR of $607 million once mature,” according to Eilers & Krejcik.

Time Is Now

Ohio was working on sports betting legislation last year. But the effort suffered setbacks because of the coronavirus pandemic. Now, states need to refresh coffers, and gaming expansion is viewed as an effective avenue for doing just that.

Buckeye State policymakers aren’t leaving anything to chance, as the sports wagering effort there will be legislated, not put before voters as a referendum. Politicians are also likely seeing the success of sports betting in nearby states, and want to act quickly to ensure Ohio gets its share of the action.

Of the five states bordering Ohio, only Kentucky doesn’t permit sports betting, and two — Indiana and Pennsylvania — are among the fastest-growing sports wagering markets in the US.

Assuming Ohio passes related legislation before the end of 2020 and it’s signed into law, gamblers there could wager on college football bowl games, the Super Bowl, and a fair amount of the 2020-21 NBA and NHL seasons. Data confirm there’s a potentially significant demand for sports betting in the state.

“We estimate that Ohio is the sixth-ranked U.S. state in terms of sports fandom, and the seventh-ranked state in terms of college football fandom,” says Eilers & Krejcik.