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After more than a year of work, the Ohio General Assembly finally passed legislation to legalize sports gambling in Ohio, which now awaits the signature of Gov. Mike DeWine.

The Senate voted 31-1 to approve the report, while the House voted 72-12 to approve it. DeWine has indicated he will sign the bill.

Once signed into law, House Bill 29 will allow for bets to be placed on collegiate and professional games, the Olympics, horse racing, motorsports and esports. Ohio residents must be 21 to bet legally.

“This is going to benefit the state of Ohio economically,” Sen. Kirk Schuring (R-29th District), who chairs the Senate’s Select Committee on Gaming told WJW-TV. “In addition, we all know that sports gaming is going on right now as we speak illegally. We’re going to put the necessary regulatory guardrails around it to make sure it’s done correctly here in Ohio.”

According to language within the bill, the Ohio Casino Control Commission (OCCC) will regulate sports betting. There will be a maximum of 25 “Type A” licenses for large retailers – casinos and racinos – and they could partner with mobile apps such as DraftKings or FanDuel.

“There will be a preference for our professional sports teams and leagues,” said Rep. Bill Seitz (R-Cincinnati) during a speech on the House floor. “There will be a preference for our existing casinos and racinos. All of those previously named entities will be eligible to apply for two contracts with sportsbooks, popularly known as ‘skins,’ that will facilitate geofenced telephonic betting, where you load money on to your iPhone. In addition to those 21 of the 25 ‘Type A licenses,’ there are four ‘Type A’ licenses left over, and each of those are eligible to get one contract with a sportsbook or one skin.”

The Ohio Society of CPAs reported “Type A” license holders will pay $3 million for the first five years for their first skin, and $10 million over the first five years for a second skin. After the first five years, the fee for each is $3 million for a five-year license.

Seitz said the state will allow up to 42 “Type B” licenses, which are brick-and-mortar sportsbooks.

The OCCC will issue a “Type C” license to any bar, restaurant or bowling alley with a permit for on-premises liquor consumption. Seitz said the fees for these simplified sports betting kiosks were reduced from $6,000 to $1,000, making them more affordable for small businesses. Additionally, those businesses can convert their existing Ohio Lottery or Keno machines to a sports betting machine if their vendor is the same as the vendor chosen by the OCCC to run sports betting machines.

Seitz told reporters the final bill maintains a “very similar structure” as the prior version, but it lowers licensing fees, directs a half-percent of licensing fees to veterans services, directs the Ohio Department of Administrative Services (DAS) to conduct an equity study and removes official league data requirements in lieu of authority for the OCCC to adopt rules to ensure data integrity, among other changes. Seitz did note that the tax rate did not change.

He noted tax revenue raised by sports betting will go to veterans services, education, extracurricular activities for indigent children and problem gambling.

The OCCC is required to designate a universal start date no later than Jan. 1, 2023.

The Zinner & Co. Tax Team is following the legislation, especially the rules that will be created to properly govern sports betting. Updates will be posted here when more information is available.