Senate committee hears sponsor testimony on bill to legalize and regulate online gambling in Ohio

The Ohio Senate Select Committee on Gaming held a first hearing on Senate Bill 197 during which sponsor Senator Manning outlined a plan to legalize and regulate internet gambling, expand iLottery and online horse racing, and consolidate gambling oversight under the Casino Control Commission.

Senator Manning, sponsor of Senate Bill 197, told the committee that "online gambling is already here in Ohio" and said the Legislature should legalize and regulate that market "just like sports betting," adding that legal markets bring consumer protections and revenue for state priorities. He described a tiered fee and tax framework that would set lower fees for operators with physical facilities and higher fees for operators without a physical presence; he provided example figures in committee testimony (a $50,000,000 initial fee and $5,000,000 renewal for operators with facilities; a $100,000,000 initial fee and $10,000,000 renewal for out-of-state operators) and said tax rates would differ by operator type.

Manning said the bill would allocate iLottery proceeds the same way the lottery currently does, and would deposit internet-gambling revenue to the state general revenue fund. He said the bill would dedicate 1% of iGaming revenue, 2% of sports-betting revenue and 0.5% of lottery revenue to a problem-gambling treatment and prevention fund; Manning estimated the 1% share could bring "approximately 5,000,000 per year," depending on overall receipts. Manning cited revenue examples from neighboring states: Michigan (he said it generates about $620,000,000 in internet gambling and about $190,000,000 in internet lottery) and Pennsylvania (he cited roughly $954,000,000 in internet gambling and $195,000,000 in internet lottery).

The bill would also: formally legalize online horse-racing wagering; remove limits on types of bets at Type C sports-gaming kiosks (kiosks Manning said could be placed in bars and restaurants); expand hours for electronic instant bingo at veterans and fraternal posts; reduce the sports-gaming tax for brick-and-mortar operators (Manning said from 20% to 10%); and consolidate regulation so similar gaming devices are overseen by a single agency, which the sponsor identified as the Casino Control Commission. Manning described several consumer protections in the draft bill, including banning the use of the word "free" in advertising when the product is not free, prohibiting gambling advertising on college campuses, and requiring operators to offer account-level default limits (time, deposit and spending controls) with the ability for players to set limits.

Ranking Member Senator DeMora pressed a constitutional and legal concern, asking, "are we even allowed to do this? I mean, I've had lawyers tell me that the constitution only that we can only do this by vote of the people and amending the constitution." DeMora also cited estimates he had that much of the state's online gambling is currently illegal and asked whether the bill includes new enforcement tools for shutting down illegal offshore sites. Manning responded that his office and counsel had reviewed legality and that attorneys who previously worked at the Casino Control Commission had advised the sponsor the plan is constitutional, while acknowledging courts ultimately could rule otherwise. Manning also said he expects legalization will reduce illegal online activity and that the committee could invite Casino Control Commission leadership to testify on enforcement tools.

Senator Lamar raised concerns about eliminating the Ohio Horse Racing Commission and how drug testing, purses and other industry-specific regulation would be preserved under consolidation; he said horse racing is a significant industry in the state. Manning acknowledged the concern, called the current online-horse-racing status a "gray area," and said moving oversight could reduce administrative cost and "could increase the purses," while offering to work with industry and commission members to refine the bill.

Senator Timken asked about underage gambling and verification. Manning replied that legalization would place age-verification and other protections in apps similar to sports-betting products, saying those apps have "pretty, stringent" age-verification systems and that the bill's consumer-protection provisions aim to reduce underage and unregulated play.

The committee did not take a vote; the hearing was recorded as the bill's first hearing and closed with no further committee action announced. Manning said staff and outside stakeholders had helped draft the lengthy measure and that the bill draws on a multi-year review of gaming policy.

The hearing concluded with the committee noting the bill's first hearing status; additional briefs, stakeholders and possible follow-up testimony were discussed but no formal direction or committee vote was taken.