Ohio Gaming Advocates Worry Over Proposed License Fees and Tax Rates in Gambling Bill
Senate Bill 197, spearheaded by Senator Nathan Manning, initiated its second hearing in Ohio's Senate Select Committee on Gaming today, with several proponents advocating for the legalization of online casinos. Although the testifiers applauded the bill's initiatives, they voiced concerns about the high license fee, tax rate, and restricted number of online casino skins.
Ryan Soultz, VP of Governmental Affairs at Boyd Gaming, highlighted the screening of the bill's fee structure as excessive, arguing it would be the highest in the nation. Moreover, testifiers criticized the proposed tax rates for online casinos, noting they were among the highest in the country.
The proposed legislation calls for the legalization of online casinos, iLottery, with varying tax rates and licensing fees across applicants. Brick-and-mortar casinos awarded an online casino license would incur a $50 million fee and be subjected to a 36% tax rate, while operators without a physical location would be required to pay $100 million and be subject to a 40% tax rate. The bill permits each license holder to partner with just one online casino platform, limiting the number of available skins to 11.
Scott Ward, spokesperson for the Sports Betting Alliance, encouraged a reduced tax rate and license fee for online casino operators and suggested allowing each license holder to partner with up to two platforms. Expanding the available skins, he contended, would help align Ohio's market with other iGaming markets across the country.
John Pappas, speaking on behalf of geolocation company GeoComply, suggested a 25% tax rate for online casinos, predicting annual revenues of more than $500 million when the market reaches maturity. He also expressed concerns about the high license fee of $50 million.
The bill's third reading is scheduled for Wednesday, May 28.
Testifiers dismissed concerns over the potential threat of online casino cannibalization on brick-and-mortar casinos and racinos. Trevor Hayes, VP of Government Relations for Caesars Entertainment, reported there was no truth to the claim. Caesars, which operates both brick-and-mortar casinos and online casinos, has found iGaming to be complementary, rather than detrimental, for their brick-and-mortar facilities.
Boyd Gaming's Ryan Soultz also pointed out the company had recently invested significantly in a brick-and-mortar casino in Pennsylvania, where iGaming is thriving. He emphasized that such investments would not have occurred if iGaming posed a threat to their business. Legalized online casinos can keep consumers engaged with gaming brands even if they do not visit brick-and-mortar facilities, according to Soultz.
In light of the proposed legislation for online casinos, Boyd Gaming's Ryan Soultz contends that the bill's proposed $50 million fee for brick-and-mortar casinos is excessive, potentially making it the highest in the nation for such licenses. Furthermore, testifiers, including Scott Ward from the Sports Betting Alliance, have criticized the proposed tax rates for online casinos, arguing for a reduction and suggesting that allowing each license holder to partner with up to two platforms could expand the available skins and align Ohio's market with other iGaming markets across the country.
