Written by Leslie Kouba, at cleveland.com – link to the original article.
CLEVELAND, Ohio – We all know sports betting became legal on January 1. We couldn’t not know. That’s because the Ohio Casino Control Commission decided to have a universal launch date, so the marketing was easy and everywhere all the time.
I’m not a gambler. I think I’ve personally bought about four scratch-offs in my lifetime. But I do remember a time when the only way to wager (illegally) on live sports was through bookies, and Cleveland had plenty of them. Maybe they’re unemployed now, but that’s not what I’m worried about.
Ohio decided to have three types of sportsbooks: those flashy online apps; the luxurious nightclub-like “in-house” sportsbooks inside casinos, racinos and pro-sports venues; and then the little sportsbook kiosks in places that have certain liquor licenses. I imagine these look like Keno games on steroids, but I can’t find a picture. The OCCC controls the apps and in-house sportsbooks, but the kiosks are the Ohio Lottery Commission’s babies. Very nice of our commissions to share.
The first round of sportsbook income for Ohio were license fees. Two kiosks for three years cost $1,000. By the end of February, there were 866 kiosks across the Ohio landscape. Easy math, right? But wait, there’s more.
Ohio’s 12 in-house sportsbooks had to pay between $50,000 and $100,000 for their licenses. That’s big, but the proprietors behind the 17 online sportsbook apps – you know the ones that have been in our faces since last football season with their billboards and commercials – they paid $3,000,000 (!!!) for a three-year license. Renewals will cost $10,000,000 in 2024. Don’t worry – they can afford it.
Just for fun, let’s average the in-house licenses at $75,000. A little math tells us Ohio has received about $52 million in licensing fees or more. (Kiosk application fees are nonrefundable, even if the license is denied. OLC is shmart.)
The $52 million from licensing fees, minus administrative costs, goes into Ohio’s Sports Gaming Revenue Fund, a new income line in the Ohio Treasurer’s books. These are not sportsbooks, but accounting books.
The law says that 98% of the money in that fund must go to education, and 2% goes to helping those with problem gambling. More on that later.
In addition to license income, Ohio has a 10% tax rate on sportsbooks’ net revenue, even though Governor Mike DeWine wanted 20%. Net revenue is what’s left of the handle (total wagers) after winnings, bad bets (think canceled games), and promotional money (free bonuses) are subtracted. That 10% rate is similar to rates in Indiana, Michigan and West Virginia, but way less than Pennsylvania (36%) and New York (10%, except 51% for online apps!)
I bet DeWine will eventually get his way, because it’s easy money.
The handles in January 2023 were extraordinary. The online sportsbook apps saw $1,090,265,212 come in, the in-house sportsbooks snagged $22,986,191, and the kiosks got $850,366. That’s $1,114,091,769 the first month of legalized sports betting. That’s over a billion dollars people took out of their wallets, savings, credit cards or worst of all – borrowed from someone who wants their money back.
Ohio got 10% of the net revenue, which the media reported as $20,000,000 for January. Exactly where all that goes isn’t crystal clear, but public education is supposed to be the primary recipient, where I hope they teach money management.
Of course, there are other gambling opportunities. In January alone, people threw $855,316,371 at casino tables, slots and horses. Gotta include the video lottery terminals, which took in about $1.2 billion in January. People love their lottery tickets, too – to the tune of about $336.1 million in just the first month of 2023.
For fun, I added it up. In total, people gave up $2,671,804,000 in one month for a chance to win. Yes. That’s right – almost 2.7 BILLION dollars. A few folks won. Sadly, most lost.
It’s not easy to tell where all of Ohio’s gambling revenue goes. When I worked at a state agency three lifetimes ago, I was told “all the beans go into the same pot and mix together, so what comes out can’t be traced back to any particular source.” Still seems like a lack of transparency. But we have bigger problems.
People are gambling away billions of dollars a month, and that’s just in Ohio. The online sportsbooks put gambling in easy reach. The apps make it look too fun. Casino sportsbooks are glamorous and beckoning. Legal sports betting is ready to take livelihoods.
March is Problem Gambling Awareness month, but I’m thinking we need more than awareness. We need to be alarmed and acutely compassionate for those caught up in problem gambling, because it’s on the rise. Ohio’s 800 helpline received more calls in the first week of January than it did the whole month the year before. We’ve got to know the resources, share the information, and talk to people – especially family and friends who might be struggling in this new environment of easy wagers.
The National Council on Problem Gambling defines problem gambling or gambling addiction as gambling behavior patterns that compromise, disrupt or damage personal, family or vocational pursuits. These symptoms can be discreet because people are typically private about finances, but if we care enough, I think we can notice more than we do now.At least we know where 2% of the state’s revenue from gambling goes. It supports problem gambling programs. NCPG lists help for Ohio at ncpgambling.org/state/ohio/. The Cuyahoga Problem Gambling Coalition, newly formed after the sportsbooks went live, is ready with counselors. The Ohio gambling hotline number is 800-589-9966. Ohio Responsible Gambling has a new campaign called Pause Before You Play with great information. Even the OLC has a great resource called Keep It Fun Ohio.
For those who know they can’t control their betting, they can put themselves on a “Do not let me gamble” list. The self-exclusion applications are at every casino, racino and online. To learn more go to timeoutohio.com/. People can exclude themselves for one year, five years, or the rest of their lives. Once on the list, there’s no turning back until the chosen term ends, lifetimes not included.
Just think what could be done in Ohio with $2.7 billion every month! We could work together to get rid of the lead-based paint. We could provide literacy programs and trades and college scholarships. We could take better care of our families, our futures and our communities.
Hey! Maybe we could even create employment counseling for the jobless bookies and transparency training for our state leaders. Just think of all we could win.
Leslie Kouba, a lifetime resident of Northeast Ohio and mother of four completely grown humans, enjoys writing, laughing and living in Cleveland with her wife, five cats and a fat-tailed gecko named Zennis. You can reach her at LeslieKoubaPD@gmail.com.
