Opponents of Ohio House iGaming Bill Concerned with Cannibalization Rates, Increased Problem Gaming

• Opponents of Rep. Brian Stewart’s (R-12) iGaming bill had their say during the legislation’s second committee hearing
• Stewart’s bill aims to legalize iGaming in the state and prohibit dual-currency sweepstakes gaming
• Legalization of iGaming may lead to cannibalization for brick-and-mortar casinos and increases in problem gaming rates

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Opponents and “interested parties” of an Ohio House of Representatives iGaming bill voiced their concerns over the potential to legalize another form of gaming in the Buckeye State.

Rep. Brian Stewart’s (R-12) iGaming bill, HB 298, this week underwent its second House Finance Committee hearing, as opponents of iGaming legalization shared their concerns over its impact on brick-and-mortar casino revenues and potential to increase problem gaming rates.

It is the second Ohio online casino bill to be considered by state lawmakers in the last month.

Negative Impacts on Ohio Casinos and Employees

A number of opponents of the bill testified for nearly an hour-and-a-half during its second committee hearing. Several opponents who testified overlapped with last week’s hearing for Sen. Nathan Manning’s (R-13) bill, SB 197, which also hopes to legalize iGaming in Ohio.

Stewart’s iGaming bill will set the state tax rate at 28% of iGaming revenues. Only Ohio-based casinos and racinos will be eligible to hold an iGaming license, which will cost $50 million and last for five years. The legislation sets the license renewal fee at $10 million.

The bill earmarks 99% of iGaming tax revenues to be deposited into the state’s general fund, with the remaining 1% deposited into the problem gambling fund.

License holders will be able to partner with up to one iGaming operator to operate its iGaming platform. If two or more companies eligible to be an iGaming operator are controlled by the same parent company, the legislation noted that only one of those companies may be an iGaming operator.

However, Ohio brick-and-mortar casino representatives shared their concerns with the bill in its current form. Chad Barnhill, executive vice president and chief operating officer for JACK Entertainment, submitted extensive testimony to the House Finance Committee decrying the attempt to legalize iGaming.

JACK Entertainment operates two gaming properties in Northeast Ohio – JACK Cleveland Casino and JACK Thistledown Racino. The legalization of iGaming, Barnhill noted in his testimony, would severely impact the two brick-and-mortar gambling facilities.

“iCasino would be a threat to Ohio businesses and employment. Every market has limits on discretionary dollars, and gaming is no exception. No matter what reports are presented to suggest otherwise, the economics are simple: online consumption cannibalizes retail activity. When gambling shifts to out-of-state online operators, local economies lose because revenues that once supported neighborhood businesses and Ohio communities are siphoned away,” he wrote.

Lucius Quick, a representative of Unite Here Local 24, the largest Ohio union representing casino workers, said iGaming poses a dire threat to casino employees and workers.

Legalized iGaming will drive people away from brick-and-mortar casinos, which will lead to less tips, less money, and less opportunities for casino employees and members of Unite Here Local 24, he said.

“However, my job is once again under threat, this time from the potential legalization of iGaming. If online casino games are legalized, I fear fewer people will visit brick-and-mortar casinos. We’ve already seen how online sports betting has reduced in-person visits to our casino sportsbook. When people visit our facilities in person, it creates worth for my employees and myself,” he said at the hearing.

Increased Problem Gaming Rates from iGaming

Mark Stewart, president of the National Association Against iGaming, noted in his submitted testimony that Pennsylvania problem gambling issues have increased since the launch of iGaming in 2019. The National Problem Gambling Council Helpline data showed a 320% increase in call from Pennsylvanians from the state’s launch of iGaming through 2024, and Ohio could expect the same if Ohio legalizes online casino.

“Further, according to a 2024 online gambling prevalence study conducted by Penn State University, 37% of people who engaged exclusively in online gambling were considered pathological gamblers. Additionally, over 43% of people who participated in some level of online gambling suffered from at least one problem gambling indicator, as compared to just 15% of those people who exclusively gamble offline,” Steward wrote in his submitted testimony.

Monty Lobb, executive director of the Christian Business Partnership, told the House Finance Committee during the hearing that according to the American Psychiatric Association’s Diagnostic and Statistical Manual of Mental Disorders (DSM-5), institutionalized gambling is “as addictive as heroin, cocaine, and opioids.”

“The revenue the gambling industry gets is based on 10% of the people who have problem gambling or are addicted. The other 90% combined is not where the revenue comes from,” Lobb said.

At the conclusion of the hearing, Stewart, who is also the chair of the House Finance Committee, did not commit to a scheduled third hearing of his bill.