Source: http://www.gamblingcompliance.com/regulatory-reports/ohio
Timestamp: 2014-04-23 11:48:57
Document Index: 534691234

Matched Legal Cases: ['Art. 2', '§ 2', 'Art. 2', '§ 2', 'Art. 3', '§ 2', 'Art. 2', '§ 8', 'Art 2', '§ 8', '§ 3772', '§ 2915', '§ 2915', '§ 3772', '§ 3772', '§ 3772', '§ 3772', '§ 3772', '§ 3772', '§ 3772', '§ 3772', '§ 6', '§ 2915', '§ 3770', '§ 3770', '§ 3772', '§ 3772', '§ 3770', '§ 3772', '§ 3770', '§ 6', '§ 3769', '§ 3769', '§ 3769', '§ 3701', '§ 2915']

Ohio | GamblingCompliance
Ohio 11 Apr, 2014 Kevin Cochran, GamblingComplianceOhio's commercial casino market has seen rapid expansion since a 2009 referendum, as the Buckeye State currently operates four commercial casinos and four racetrack casinos, and is expecting to have three more racetrack casinos in operation by the end of 2014. The state also hosts a lucrative state lottery, pari-mutuel wagering, off-track betting and advance deposit wagering, and charitable gaming.
Table of Contents Recent Update
2. Market Framework
3. Political Framework
3.1 Gaming-Related Legislative Issues
3.2 Pending Litigation of Note
4. Definition of Gambling
5. Sector-by-Sector Analysis
5.1 Casino-Style Gambling
5.2 Charitable Gaming
5.3 Gaming Machines
5.4 Internet Gambling
5.5 Lottery Games
5.6 Player Protection / Problem Gambling
5.7 Racing
5.8 Sports Betting
5.9 Sweepstakes Regulations
5.10 Tribal Government Gaming
7. GamblingData Charts and Data
Information has been updated or added regarding the following:
Commercial casino statistics.
House Bill 325.
Status of Internet sweepstakes cafes and skill-based amusement games in the state.
The status of racetrack casinos in the state.
Lottery expansion in Ohio.
Relevant information in the text is highlighted in gray. 1. Executive Summary
Ohio, the seventh most populated state, has experienced massive growth in its gaming market. The Buckeye State currently has four casinos in operation that offer table gaming and slot machines. Although casinos were illegal in Ohio, voters ultimately offered their approval for casino-style gaming at four locations in a December 2009 referendum. Later, in May 2010 a referendum approved adjusting the location for the Columbus casino. Specifically, the amendment authorizes one casino facility in Cincinnati, Cleveland, Columbus and Toledo.
The state also offers pari-mutuel wagering, off-track betting and advanced deposit wagering in its racing sector. In 2012, the racetracks first started offering video lottery terminals (VLTs). Currently, four racetracks operate VLTs and the other three racetracks are in various stages of the licensing process.
The state lottery, created from a 1973 constitutional amendment, operates scratch tickets, online sales and VLTs. In FY2013, the lottery generated ticket sales of $2.7bn, with $165.5m generated in VLT revenues. The Lottery Commission has also been in charge of charitable gaming, bingo and raffles, in the state since 2004.
Sweepstakes cafes are offered across the state on a limited basis. The state has placed a halt on expansion of new cafes and a regulating scheme, effectively regulating sweepstakes cafes out of operation, went into effect October 4, 2013.
Governor John Kasich has been a proponent of gambling expansion in the state as a means of raising revenue, presiding over the relocation of two racetracks, the expansion of VLTs into racetracks and the addition of multiple lottery games, including Mega Millions and keno. Governor Kasich, a Republican, was elected to his first term in 2010, and is a former member of the U.S. House of Representatives.
The first part of Ohio's 2013-2014 legislative session was dominated by sweepstakes litigation. The second part of the legislative session looks to be dominated by an off-shoot of sweepstakes cafes, "skill-based amusement games."
The Ohio Casino Control Commission oversees commercial gaming in the state. The Lottery Commission is in charge of the state lottery, video lottery and charitable gaming in the state. The Ohio State Racing Commission is now in charge of licensing racetracks as video lottery sales persons on top of monitoring pari-mutuel wagering, off-track betting at one site and advanced deposit wagering known as telephone account wagering.
Since the passage of a voter referendum in 2009, allowing for four commercial casinos in Ohio, the state's gaming landscape has changed drastically. The four approved casino locations of Cincinnati, Cleveland, Columbus and Toledo are to be operated by two operators.
Cleveland: Horseshoe Casino Cleveland
The first casino in Ohio, the Horseshoe Casino Cleveland, opened Phase I of its facility on May 14, 2012. Phase II of the casino, a new building across from the NBA's Cleveland Cavaliers stadium (Quicken Loans Arena), is expected to open, but a date has not yet been set.
The casino can operate no more than 5,000 slot machines. Approximately 1,900 are operated. There is no limit on table games. The casino operates 89 table games and 30 poker tables. Toledo: Hollywood Casino Toledo
Toledo, the fourth most populous city in Ohio, is home to the second casino in the state. The Hollywood Casino Toledo opened on May 29, 2012. The casino can operate no more than 5,000 slot machines. Approximately 2,000 are operated. The casino also operates 60 table games and 20 live poker tables.
Franklin County: Hollywood Casino Columbus
The Hollywood Casino Columbus opened on October 8, 2012. It is the biggest casino in Ohio until Phase II of the Horseshoe Casino Cleveland opens.
The casino can operate no more than 5,000 slot machines. The casino operates more than 2,500 slot machines, 70 table games and a 30-table poker room. Cincinnati: Horseshoe Casino Cincinnati
The Horseshoe Casino Cincinnati, Ohio's most recently opened casino, began operations on March 4, 2013. The casino can operate no more than 5,000 slot machines. The casino operates more than 2,000 slot machines, 87 table games and a 31-table poker room.
Caesars' operates both the Horseshoe casinos in partnership with Rock Gaming. Rock Gaming is partially owned by Dan Gilbert, a prominent Cleveland businessman and majority owner of the Cleveland Cavaliers. Penn National Gaming operates both Hollywood branded casinos. Both Caesars-Rock Gaming and Penn National Gaming have interest in some of the state's racetracks which are permitted to operate video lottery terminals (VLTs).
The Ohio Casino Control Commission releases monthly revenue figures, which can be found here. The first casino opened its doors in May 2012 and in October 2013 the entire casino sector exceeded the $1bn barrier in adjusted gross gaming revenues. Casino leadership in the market currently oscillates between Horseshoe properties in Cincinnati and Cleveland. As of February 2014, the Ohio casino market had 8,216 slot machines and 431 table games.
The competitive nature of the market has seen the four casinos offer tens of millions in free slot play, as well as free table play, with promotional spend around $14m, although this has now decreased. Several analysts suggest the slow ramp up in the market is due to the fact that Ohio casino patrons are unseasoned gamblers, despite being landlocked by well-established gaming markets. The introduction of the casinos and expansion of VLT play has consequently hit neighboring Indiana casinos, notably in the south, while Hollywood Toledo's opening coincided with Detroit's casino market slump.
Currently, the state has 26 licensed casino vendors. Generally, licenses run for three years in the Buckeye State. A list of all licensed vendors in the state can be found here. Twenty-one contracts are set to expire in 2015 and five are set to expire in 2016.
In September 2013, the Ohio Casino Control Commission announced a $4.9m problem gambling plan, to be funded by taxes from the state's four casinos. The state, through a 2012 study, found that approximately 250,000 Ohioans could be problem gamblers or could be at risk of developing a gambling addiction. Through the plan, the state will pay for all problem gambling treatment services in the state.
In 1973, Ohio voters approved an amendment to the state's constitution that created the lottery, making Ohio the tenth state in the country to approve a lottery. The following year, Buckeye 300 became Ohio's first lottery game, going on sale in August 1974. Now, the lottery offers online games like Pick 3, Pick 4, Rolling Cash 5, Classic Lotto, Raffle, Kicker, Mega Millions/Megaplier, EZ Play, Ten-Oh, Keno/Booster and Powerball/Power Play. The state also offers instant tickets and VLTs at racetracks. The Lottery Commission has been in charge of charitable gaming since September 2004.
For FY2013, traditional online and draw ticket sales fell 1.5 percent year-on-year to $2.7bn. However, driven by a bigger contribution of VLT revenue at the state's racinos, the lottery generated a record $2.86bn in revenues.
FY2012 online ticket sales increased by $93.3m, or 8.2 percent, and instant ticket sales increased by $44.7m, or 3.1 percent, over 2011 figures. $803m of the lottery's total revenue was distributed to Ohio's schools, which was up by $32m from FY2012. This is the highest profit transfer in the lottery's 37-year history. Since inception, the Ohio Lottery has contributed more than $19.4bn toward the state's public school system.
During FY2011, the lottery exercised the first renewal of its online gaming contract with Intralot. The original contract provided for a two-year deal with the chance for up to four two-year renewals. Ohio has instant ticket contracts with Intralot, Scientific Games and Pollard Banknote. All of those contracts were set to expire in 2013 but have been renewed for an additional two years. In 2011, Ohio awarded Intralot its VLT contract, to run for approximately eight years. This lucrative deal covers around 17,500 VLTs in racetracks throughout the state.
In Ohio and elsewhere Internet sweepstakes cafes became a legal issue in 2012, challenging state gambling laws. The cafes feature computer games that simulate casino-style gaming. Players go to the cafes and purchase phone cards or Internet time, for which they also receive a certain amount of promotional credits. One way that customers can redeem their promotional credits is to play games that simulate casino gaming on the computer. The cafes award players credits, prizes and, in some cases, cash.
Gambling is generally considered to have three elements: prize, chance and consideration. Opponents of the cafes argue that the cafes are essentially gambling establishments which compete with casinos and racetrack gaming but are not required to follow gambling regulations. The cafes argue that they operate legally under game promotion and sweepstakes laws because the outcome of the games are predetermined and cannot be changed by the playing of casino-style games. The game is simply a mechanism for revealing whether a customer won the promotion. In addition, the cafe supporters point out that no purchase is required for receiving promotional credits.
In 2012, the Ohio General Assembly passed a one-year moratorium on the opening of new sweepstakes cafes, which was set to expire on June 30, 2013. However, Senate Bill 115 was passed in May, extending the moratorium on new sweepstakes cafés in Ohio until June 30, 2014.
During the first part of the 2013-2014 legislative session, House Bill 7 was also passed.
Opponents of HB 7 have started a ballot initiative to overturn the bill. The initiative requires more than 231,000 names from 44 different counties.
On initial submission, the ballot initiative fell short. Although the opponents of HB 7 submitted almost 434,000 signatures, only 160,000 were found valid by the Secretary of State Jon Husted. The opponents then had a ten-day period to acquire the 71,000 plus valid signatures needed to get the question on the ballot. They were unable to do so.
In response to the ballot initiative, Senate Bill 141 was introduced in June 2013. The bill regulates sweepstakes cafes by capping the gross revenue of sweepstakes operations for a business at 5 percent. The bill carries an emergency clause, meaning it could not be overturned by a voter referendum, as it would go into effect as soon as the governor signs the bill. The bill has passed the Senate and is pending in the House Policy and Legislative Oversight Committee.
House Bill 7 came into effect on October 4, 2013.
Ohio is also home to seven racetracks. The racetracks saw pari-mutuel wagering revenues reach $177.3m in CY2012, with losses across the board, except at River Downs and Scioto Downs. Legislators have been looking to aid the struggling racetracks. An off-track betting facility is located in Sandusky, Ohio. The state also allows advanced deposit wagering, called telephone account wagering.
$16.827m $23.957m Belterra Park
$38.486m $36.632m Thistledown
$42.760m $50.374m Lebanon Raceway
$23.615m $26.657m Northfield Park
$49.098m $51.511m Raceway Park
$18.524m $21.995m
$22.994m $18.205m Following the passage of House Bill 386 (allowing VLTs in racetracks) and House Bill 277 (allowing for the relocation of a few racetracks) in 2012, racetracks in Ohio have been given a facelift.
The first racetrack casino opened at Scioto Downs on June 1, 2012. In the first 12 months of operation, the VLTs generated net win of $136m. As of October 2013, the property had 2,107 VLTs. Thistledown became Ohio's second racetrack to commence VLT operations on April 9, 2013. In the period between April and October 2013, the VLTs generated net win of $77m.
In December 2013, two racetrack casinos opened in the Buckeye State.
On December 12, Miami Valley Gaming opened. It relocated seven miles west from its old raceway, previously known as the Lebanon Raceway, and was able to avoid the $75m relocation fee that the two Penn National racetracks (Beulah Park and Raceway Park) faced. The racetrack casino boasts 1,600 VLTs, and is operating through a partnership between Churchill Downs and Delaware North.
On December 18, the Hard Rock "Rocksino" Northfield opened in northeast Ohio. Hard Rock purchased the old Northfield Park, and branded the raceway as its first "rocksino," which focuses on music and entertainment. The new racetrack casino has more than 2,200 VLTs.
As of February 2014, there are 7,079 VLTs spread across the four racetrack casinos. In the same month, the four venues saw $484.4m credits played, and generated net win of $43.6m. The introduction of the two racetrack casinos saw slot promotional spend rise to $8.1m in February 2014, outstripping the amount offered by the four casino venues in the same month.
Belterra Park Gaming and Entertainment Center received its temporary license to operate VLTs on January 14, 2014.
The other two remaining racetracks, Raceway Park and Beulah Park, have submitted applications that are currently being reviewed. A list of the VLT entity licensing status can be found on the Ohio Lottery's website here.
Two racetracks are undergoing a relocation process to avoid competing with nearby casinos in Toledo and Franklin County. The state is allowing Beulah Park, located in Columbus, and Raceway Park, located in Toledo, to move to Youngstown and Dayton, respectively. In 2012, an anti-gambling policy group challenged the constitutionality of the state allowing VLTs at racetracks. The case was dismissed for lack of standing and the group has since appealed. An appeal to the Ohio Supreme Court is currently pending.
The state also authorizes charitable gaming run by the state lottery in the form of bingo and raffles.
Political Framework at a Glance
John Kasich (R-took office 2011) Legislative Makeup
Senate (23R, 10D) and House of Representatives (60R, 39D) Elections
All legislators are elected on two-year terms. In both houses, there is a four-term (eight-year) limit.
A regular session shall convene on the second Tuesday of January. Sessions shall not exceed 40 legislative days. Legislative sessions usually last 40 days in odd-numbered years and 35 days in even-numbered years.
Bill File Deadline
No Gaming Oversight Committee(s)
Joint Committee on Gaming and Wagering. Fiscal Year
July 1-June 30 Representatives are elected biennially in even-numbered years. Representatives are limited to two consecutive terms in office, after which they must wait one term before being eligible to run again. Art. 2 § 2. Senators are elected every four years, with 17 elected one year, and 16 elected two years after. Art. 2 § 2. Gubernatorial elections occur every four years. Art. 3 § 2. Senators and the governor are limited to two consecutive terms, as the constitution requires they wait one term before running again.
Ohio holds annual legislative sessions. Regular sessions of the Ohio General Assembly convene on the first Monday of January in odd-numbered years, or on the following day if the first Monday is a holiday. The next year's regular sessions convene on the same date the following year. Art. 2 § 8. Either the governor or the presiding officers of the General Assembly may call a special session of the General Assembly. Art 2. § 8.
Chapter 3772 of the Ohio Revised Code establishes a permanent committee on gaming and wagering. The Joint Committee on Gaming and Wagering consists of six members and is responsible for reviewing all constitutional amendments, laws, and rules governing the operation and administration of casino gaming and all wagering activities throughout the state. Ohio Rev. Code § 3772.032(B).
The legislature sets the deadline for filing bills for each session. After a bill passes both houses of the General Assembly in identical form it proceeds to the governor to approve or veto the measure. During session, the governor must sign or veto legislation within ten days of transmittal (except Sundays), or it becomes law without signature. 3.1 Gaming-Related Legislative Issues
House Bill 472 Ohio passes its budget every two years. As a result, the year after the operating budget is passed, the Office of Budget and Management is tasked with reviewing the state government agencies and programs in what is referred to as the "Mid-Biennium Budget Review."
In 2014, House Bill 472 is serving as the vehicle for the Mid-Biennium Budget. HB 472 would make "skill-based amusement machines or slot machines used in violation of this chapter [2915] or Chapter 3772 of the Revised Code" a gambling device. The bill would require operation of a license from the Casino Control Commission for skill-based amusement machines.
The issue has arisen as a result of Internet sweepstakes cafes operating as similar machines to the machines banned in 2013 as "skill-based amusement games." Matt Schuler, executive director of the Casino Control Commission, recently said: "No one's intent is to go after a Chuck E. Cheese or a Dave & Busters. Those aren't the business that we're trying to make sure that we're looking at. It's the ones that are operating illegal slot machines under the veil and calling them skill games."
In January 2013, Representative Matt Huffman (R-4th District) introduced House Bill 7. Previously, in November 2012, Rep. Huffman introduced an almost identical bill, HB 605, but it failed to pass. HB 7, which has passed the House, would effectively prohibit sweepstakes terminal devices as they are currently operated. HB 7 would amend the definition of "scheme of chance," to include electronic devices revealing game entries if consideration is paid.
The bill outlined examples of when consideration is paid:
Less than 50 percent of the goods or services sold are used by patrons.
Less than 50 percent of patrons use or redeem the goods or services sold.
More than 50 percent of prizes are revealed in a fashion similar to a "casino game."
A patron pays more than fair market value for goods or services to receive promotional entries.
A patron can purchase additional promotional plays directly from the electronic device.
A cafe owner pays out more than 20 percent of the gross revenue received at the cafe in prize money.
A full list for "valuable consideration" under the bill would be codified in Section 2915(C) of the Ohio Revised Code.
Additionally, the bill requires operators of sweepstakes terminal devices to register with the Attorney General, as well as obtain a certificate of compliance. The registration fee is $200 annually and the certificate of compliance is $250, and must be reapplied for every year. All registration and certification decisions are at the discretion of the Attorney General. On top of those fees, an operator must also file monthly reports, with a filing fee of $50.
As per sweepstakes terminal device operation, an operator is allowed a maximum of two terminal devices accounting for less than 3 percent of the business' gross revenue. The bill also sets a maximum prize limit of $10 for any single play. The bill passed the General Assembly and was signed into law May 29. The bill went into effect September 4, 2013.
Lottery Expansion In March 2014, the Ohio Controlling Board (OCB) unanimously approved a request to exercise an offered option in the state lottery's contract with Intralot to purchase and operate up to 1,200 multi-purpose, next generation gaming machines to be placed in veteran and fraternal organizations. The OCB "provides legislative oversight over certain capital and operating expenditures by state agencies and has approval authority over other various state fiscal activities… ." Approval was received, despite an objection from representatives from at least 20 veterans groups attending the OCB meeting.
Ohio Roundtable's lawsuit against VLTs
In May 2012, Judge Timothy S. Horton of the Franklin County Court of Common Pleas dismissed a lawsuit challenging Ohio's lawmakers' authority to authorize video lottery terminals (VLTs) at racetracks. The Ohio Roundtable, an anti-gambling policy group, believed the decision to put VLTs into racetracks should have passed a referendum, similar to the measures allowing the state's four casinos from 2009. The judge did not agree and dismissed the case, holding the Ohio Roundtable did not have proper standing to challenge the suit. The bill authorizes around 17,500 slot machines throughout seven racetracks in the state.
In particular, the judge found the Ohio Roundtable's vice-president's past as a problem gambler did not give him proper standing to challenge an aspect of legalized gambling in the state. Judge Horton found overturning the implementation of VLTs at racetracks could not properly redress vice president Thomas Walgate's injuries, emphasizing how allowing standing in this case would greatly expand standing as a legal concept. The anti-gambling group appealed, with the Franklin County Court of Appeals hearing arguments on January 17, 2013. The Court of Appeals found that the Ohio Roundtable lacked standing on March 14, 2013.
The Ohio Roundtable appealed the decision to the Ohio Supreme Court. The Ohio Attorney General's office then filed a memorandum in May 2013 urging the court not to hear the appeal. The Ohio Roundtable announced in late June that it would not file a memorandum in response. In July 2013, the Supreme Court agreed to hear the case.
Attorney General Mike DeWine's crusade against electronic raffles and poker machines
After leading a successful crackdown on Internet sweepstakes cafes machines during 2013, Attorney General Mike DeWine has turned his intention to electronic raffle machines. According to a December 5, 2013 press release, DeWine, in October, gave notice to the organization representing groups operating these machines that they were illegal. He also stated that he would begin inspecting these machines. DeWine waited until the legislature adjourned until 2014 before he cracked down on the machines.
House Bill 325, covered in the section above, did not garner enough support to be passed by the end of 2013. The bill was considered when the General Assembly reconvened on January 7, 2014.
As a result, veterans', fraternal, and sporting organizations began shutting down their machines, fearing intervention by the attorney general accompanied with legal repercussions. Then, the Ohio Veterans and Fraternal Charitable Coalition (OVFCC) filed a lawsuit, enjoining the actions of DeWine's office and seeking a temporary restraining order in the Franklin County Court of Common Pleas, urging the judge to let the machines run until an official judicial decision can be made. On December 20, Judge Laurel Beatty partially sided with the OVFCC, granting the temporary restraining order. The judgment was set to run for 14 days, but an extension of at least four months was mutually agreed, although it is likely to continue until June 2014 or later.
The Ohio Revised Code does not explicitly define gambling, but it does prohibit certain acts and classify them as gambling. Ohio Rev. Code § 2915.02. The following are illegal under Section 2915.02 of the Ohio Revised Code, titled "Gambling":
Violation of any of this statute is considered a misdemeanor in the first degree. Ohio Rev. Code § 2915.02.
In Ohio, it is the union of consideration, chance and prize that constitutes illegal gambling. Ohio v Dabish, (Nov. 18, 2009), CRB-08-25138 at Opinion, pgs. 2-3; citing F.C.C. v American Broadcasting Co., 347 U.S. 284 (1954).
Ohio's constitution specifically authorizes a lottery, bingo and four casinos in the state.
Although not listed in any Ohio statute, the state appears to follow the dominant factor test. In Katmandu, Inc. v Liquor Control Commission (2002) Franklin App. No. 01CVF10-10134, affirmed by the Tenth District Court of Appeals, the court used the "predominate purpose of operating the machine" as the determination for whether a gambling machine was illegal or not.
Regulated Allowed at four specified locations by a constitutional amendment in 2010.
Regulated Bingo and raffles may be operated by 503(c) nonprofits. Gaming Machines
Regulated Slot machines are permitted at the state's casinos and VLTs are permitted at the state's racetracks.
Prohibited Internet gambling is prohibited in the state, with the exception of advance deposit wagering on horseracing. Lottery Games
Regulated Lottery games, including instant tickets, monitor games and video lottery terminals are authorized in the state.
Regulated Ohio offers pari-mutuel wagering, off-track betting and advanced deposit wagering on horseracing. Sports Betting
Prohibited Sports betting is prohibited in the state. Sweepstakes
Prohibited/Regulated Retailers offering sweepstakes at Internet cafes can continue to offer the games, while a moratorium has been placed on the opening of new sweepstakes cafes as the General Assembly attempts to resolve the confusion surrounding sweepstakes in Ohio.
Prohibited There are currently no tribal-state gaming compacts in Ohio. 5.1 Casino-Style Gambling
The Ohio constitution allows for four casinos throughout the state, located in Toledo, Cleveland, Cincinnati and Franklin County. As the four locations are written into the constitution and were only approved after constitutional amendment, adding more casinos to the state would likely require another constitutional amendment.
Regulatory Overview of Casino-Style Gambling
The Ohio Casino Control Commission is responsible for regulating Ohio's casinos. Ohio Rev. Code § 3772.02. The commission consists of seven members, serving four-year terms. The commission is authorized to "complete the functions of licensing, regulating, investigating, and penalizing casino operators, management companies, holding companies, key employees, casino gaming employees, and gaming-related vendors." Ohio Rev. Code § 3772.03(A). Chapter 3772 grants the commission great discretionary powers to inspect casinos and gaming equipment, audit gaming operations, and investigate suspected violations of Ohio's gaming laws. Ohio Rev. Code § 3772. A full list of the commission's powers can be found here.
Chapter 3772 of the Ohio Revised Code authorizes commercial casinos in Ohio. Specifically, the chapter authorizes "casino gaming". Casino gaming is defined as "any type of slot machine or table game wagering, using money, casino credit, or any representative of value, authorized in any of the states of Indiana, Michigan, Pennsylvania, and West Virginia as of January 1, 2009, and includes slot machine and table game wagering subsequently authorized by, but shall not be limited by, subsequent restrictions placed on such wagering in such states." Ohio Rev. Code § 3772.01(E). Ohio's neighboring states offer table games such as blackjack, Caribbean stud, craps, roulette and other miscellaneous games.
Casinos may have a maximum of 5,000 slot machines and there are no limits on the amount of table games. Ohio Rev. Code § 3772.20(A). The minimum payout for slot machines is 85 percent. Ohio Rev. Code § 3772.20(D). The chapter does not outline minimum and maximum wagers; that is left to the discretion of the casino operators. Ohio Rev. Code § 3772.20(C).
With regard to licensing issues, the Ohio Casino Control Commission retains regulatory control and oversight for the licensing process. Licenses can be issued for up to three years. Upon expiry, the commission will re-evaluate an applicant's suitability, and conduct a new background investigation.
The following measures are applicable for the licensure of a casino operator, management company, holding company, key employee, casino gaming employee, or vendor-related license.
Under Section 3772.10(A) of the Ohio Revised Code the commission will consider the following when assessing an applicant's suitability for a license:
Applicant's reputation, experience and financial integrity.
An applicant's holding company, or any other individual that directly, or indirectly, controls an applicant, will also be subject to review of reputation, experience and financial integrity.
Applicant's (and its affiliates) past and present compliance with casino-related licensing requirements in any applicable jurisdiction.
Indictment, conviction, or a plea of guilt or no contest pertaining to any criminal offense (both felony and misdemeanor), under any jurisdiction's laws.
Applicant's filing for bankruptcy of involvement with adjusting, deferring, or suspending any debts.
Applicant's involvement in litigation involving any business practices.
Awarding the license would undermine the public's confidence in the state's casino industry.
The information required to apply for a license can be found in Section 3772.11 of the Ohio Revised Code.
The disclosure threshold that a casino operator, management company, or holding company license application must contain regarding the identity of persons having a direct or indirect interest in the applicant for which the license is sought to greater than 5 percent for all companies, whether public or private. Ohio Rev. Code § 3772.11.
Section 3772.24 of the Ohio Revised Code states: "An individual who is less than twenty-one years of age may enter a designated area of a casino facility where casino gaming is being conducted, as established by the commission, to pass to another area where casino gaming is not being conducted. An individual who is less than twenty-one years of age shall not make a wager under this chapter."
Chapter 3794 of the Ohio Revised Code outlines a smoking ban. The state-wide ban covers all enclosed areas where the public is invited, including bars, restaurants and gaming facilities.
A 33 percent tax shall be collected on all gross casino revenue. Art. XV § 6(c)(2).
The proceeds of the tax on gross revenue will be distributed as follows:
51 percent to the 88 counties in proportion to their populations.
34 percent to the 88 counties in proportion to their public school district student populations.
5 percent to the host city where the casino is located.
3 percent to the Ohio Casino Control Commission.
3 percent to the Ohio State Racing Commission.
2 percent to a state law enforcement training fund.
2 percent to a state problem gambling and addictions fund.
Regulatory Overview of Charitable Gaming
Since 2004, charitable bingo licensing has been regulated by the Ohio State Lottery Commission. The commission will conduct site visits with license holders, reviewing records and verifying a licensee's bingo supplies were purchased from licensed suppliers.
To operate bingo throughout the state, an organization must qualify as a charitable organization. Section 2915.01(H) of the Ohio Revised Code defines a charitable organization as:
"(1) An organization that is, and has received from the internal revenue service a determination letter that currently is in effect stating that the organization is, exempt from federal income taxation under subsection 501(a) and described in subsection 50(c)(3) of the Internal Revenue Code;
(2) A volunteer rescue service organization, volunteer firefighter's organization, veteran's organization, fraternal organization, or sporting organization that is exempt from federal income taxation under subsection 50(c)(4), (c)(7), (c)(8), (c)(10), or(c)(19) of the Internal Revenue Code."
To qualify as a "charitable organization," an organization shall have been in continuous existence as such in this state for a period of two years immediately preceding either the making of an application for a bingo license under Section 2915.08 of the Ohio Revised Code or the conducting of any game of chance as provided in Section 2915.02(D) of the Ohio Revised Code.
Ohio authorizes bingo, instant bingo at a bingo session, or instant bingo other than at a bingo session for a charitable organization. Licensing is covered under Section 2915.08 of the Ohio Revised Code.
An organization can apply for a charitable bingo license here. An organization that can operate bingo in the state can operate raffles in Ohio. Ohio Rev. Code § 2915.092.
Distributions of net profits from proceeds of the sale of bingo tickets in Ohio are described in Section 2915.101 of the Ohio Revised Code. Licensing fees can be found in Section 2915.08 of the Ohio Revised Code.
Section 2915.01(F) of the Ohio Revised Code defines a "gambling device" as:
Legal Gambling Devices
Ohio operates video lottery terminals (VLTs) at racetracks throughout the state and slot machines in commercial casinos. Intralot owns the exclusive contract to provide VLTs throughout Ohio and a list of licensed vendors for slot machines can be found here.
Regulatory Overview of Gaming Machines
Definition of Slot Machine and Video Lottery Machine
Slot Machine: Section 3772.01(X) of the Ohio Revised Code defines a slot machine as: "Any mechanical, electrical, or other device or machine which, upon insertion of a coin, token, ticket, or similar object, or upon payment of any consideration, is available to play or operate, the play or operation of which, whether by reason of the skill of the operator or application of the element of chance, or both, makes individual prize determinations for individual participants in cash, premiums, merchandise, tokens, or anything of value, whether the payoff is made automatically from the machine or in any other manner, but does not include any device that is a skill-based amusement machine."
Video Lottery Terminals (VLTs): Section 3770.21 of the Ohio Revised Code defines VLTs as: "Any electronic device approved by the state lottery commission that provides immediate prize determinations for participants on an electronic display that is located at a facility owned by a holder of a permit as defined in rule 3769-1-05 of the Administrative Code."
Section 3772.20(A) of the Ohio Revised Code stipulates: "[N]o slot machine shall be set to pay out less than the theoretical payout percentage, which shall be not less than eight-five percent, as specifically approved by the commission. The commission shall adopt rules that define the theoretical payout percentage of a slot machine based on the total value of the jackpots expected to be paid by a slot machine divided by the total value of slot machine wagers expected to be made on that slot machine during the same portion of the game cycle. In determining the theoretical payout percentage, the commission may consider market conditions, the payout percentage in other states, the impact on gaming within the market, or any other factor the commission deems relevant. The commission may adjust the payout percentage at any time."
VLTs in the Buckeye State also must pay out a minimum of 85 percent of what they take in. Ohio Admin. Code § 3770:2-10-60(D).
Section 3772.31(B) of the Ohio Revised Code requires that the commission certify an independent lab, which will be tasked with testing and technically evaluating all slot machines, slot accounting systems and electronic table games. To be eligible, the laboratory must be accredited by a national accreditation body. Under the language of this provision, the commission has discretion to certify a lab if it is "competent and qualified to scientifically test and evaluate electronic gaming equipment ... and otherwise perform the function assigned. An independent testing laboratory shall not be owned or controlled by, or have any interest in, a gaming related vendor of electronic gaming equipment."
The statute does not exclusively outline ways to pay for credit at slot machines, but does have a section detailing the purchase of tokens, chips, electronic cards and promotional gaming credits. See Section 3772.23 of the Ohio Revised Code.
Wagers may be placed using currency, credit vouchers, replays of credits awarded, value credits or any form of card which contains credit for play on a VLT. Ohio Admin. Code 3770:2-7-01(C).
Information on gaming-related vendor licenses can be found in Sections 3772.11, 3772.12, and 3772.121 of the Ohio Revised Code.
Licenses for VLTs are outlined extensively in Section 3770:2:3:01 of the Ohio Administrative Code. Licensing fees, including fees for key gaming employees, technology providers and video lottery sales agents are covered in Section 3770:2-11:01 of the Ohio Administrative Code.
VLT Taxation
VLT taxation is outlined in Section 3769.087 of the Ohio Revised Code. The revenue is split by contributing 66.5 percent to the Ohio State Racing Commission and 33.5 percent to the Ohio Lottery.
Ohio does not have an express statutory provision on Internet gambling; however, Internet gambling is most likely illegal under the general gambling provisions of the Ohio Revised Code.
Ohio has operated a lottery since 1974. Currently the lottery offers online ticket sales, instant tickets and VLTs at one racetrack, with VLT licenses pending approval.
Regulatory Overview of Lottery Games
The Ohio Lottery Commission administers the Ohio Lottery. The commission comprises nine members who are appointed by the state governor, with the advice and consent of the Senate. It cannot be composed of more than five members from the same political party. Commissioners are also prohibited from holding any pecuniary interest in any contract or license that has been issued by the Lottery Commission. The governor has discretion to remove a commissioner for "malfeasance, misfeasance, or nonfeasance in office." The commission is responsible for the following:
Establishing the rules which govern all state lottery games.
The type of lottery to be conducted.
The prices of lottery tickets.
The number, nature, and value of prize awards, the manner and frequency of prize drawings, and the manner in which all prizes will be awarded to winning ticket holders. The manner in which lottery sales revenues are to be collected, including authorization for the director to impose penalties for failure to transfer funds in a timely manner.
The amount of compensation provided to lottery ticket retailers.
Establishing and upholding the licensing criteria as well as criteria for suspending or revoking retailer licenses. At least one commissioner must represent an organization that deals with problem gambling and assists recovering gambling addicts. All commissioners are required to have professional or educational experience in business administration, management, sales, marketing or advertising. Licensing
Before any retailer is granted a license to sell lottery tickets, the director of the Ohio Lottery Commission must consider the following factors outlined in Section 3770.05 of the Ohio Revised Code: A license is effective for at least one year, but not more than three years. More information on licensing can be found in Chapter 3770:1-3 of the Ohio Administrative Code.
According to Section 15.06(A) of the Ohio constitution, lottery proceeds shall be used solely for the support of elementary, secondary, vocational, and special education programs as determined in appropriations made by the General Assembly.
No person under 18 years of age can participate in the lottery. Ohio Rev. Code § 3770.08(C).
Under Chapter 3772 of the Ohio Revised Code, the director of the Ohio Casino Commission must enter into an agreement with the Department of Alcohol and Drug Addiction Services under which the department provides a program on behalf of the commission. This program is to include a toll-free number where Ohio residents can access information on problem gambling, gambling addiction services available in the state and how a problem gambler may receive help. Ohio Rev. Code § 3772.02.
One must be at least 21 years of age to make a wager in one of the four casinos in Ohio. Ohio Rev. Code § 3772.99. No person under 18 years of age can participate in the lottery. Ohio Rev. Code § 3770.08(C). Section 3769.08(A) of the Ohio Revised Code requires patrons to be of "legal age" to place pari-mutuel wagers in the state, which is 18 years of age.
Casinos in the state operate 24 hours a day, seven days a week. Self-Exclusion Programs
The Ohio Casino Commission has the authority to establish a voluntary exclusion program. Ohio Rev. Code § 3772.03(10). A person who agrees to enter the program shall stay away from casinos in the state. Their information will be confidential, and the casino operator must make reasonable attempts to not direct marketing efforts at a person participating in the program.
Video Lottery Terminals (VLTs): The minimum wager for each VLT is $0.01 and the maximum wager shall be determined by the director or commission in accordance with commission rules. Ohio Admin. Code § 3770:2-10.
A 33 percent tax shall be collected on all gross casino revenue. Art. XV § 6(c)(2). From that tax, 2 percent goes toward funding problem gambling in the state.
Horseracing is regulated under Chapter 3769 of the Ohio Revised Code.
Regulatory Overview of Pari-Mutuel Wagering
The Ohio State Racing Commission regulates racing and pari-mutuel wagering throughout Ohio. The commission consists of five members appointed by the governor, with the advice and consent of the Senate. Ohio Rev. Code § 3769.02.
Applications for permits to conduct pari-mutuel wagering are described in Sections 3769.04-.07 of the Ohio Revised Code.
Section 3769.08(A) of the Ohio Revised Code requires patrons to be of "legal age" to place pari-mutuel wagers in the state, which is 18 years of age.
Under Section 3769.08(B) of the Ohio Revised Code: "At the close of each racing day, each permit holder authorized to conduct thoroughbred racing, out of the amount retained on that day by the permit holder, shall pay by check, draft, or money order to the tax commissioner, as a tax, a sum equal to the following percentages of the total of all moneys wagered on live racing programs on that day and shall separately compute and pay by check, draft, or money order to the tax commissioner, as a tax, a sum equal to the following percentages of the total of all money wagered on simulcast racing programs on that day:
(1) One per cent of the first two hundred thousand dollars wagered, or any part of that amount;
(2) Two per cent of the next one hundred thousand dollars wagered, or any part of that amount;
(3) Three per cent of the next one hundred thousand dollars wagered, or any part of that amount;
(4) Four per cent of all sums over four hundred thousand dollars wagered."
Under Section 3769.08(C) of the Ohio Revised Code: "At the close of each racing day, each permit holder authorized to conduct harness or quarter horse racing, out of the amount retained that day by the permit holder, shall pay by check, draft, or money order to the tax commissioner, as a tax, a sum equal to the following percentages of the total of all moneys wagered on live racing programs and shall separately compute and pay by check, draft, or money order to the tax commissioner, as a tax, a sum equal to the following percentages of the total of all money wagered on simulcast racing programs on that day:
Further taxes on pari-mutuel wagering are detailed in Section 3769.08 of the Ohio Rev. Code.
Advanced deposit wagering is legal under Section 3769-3-32 of the Ohio Administrative Code: "Holders of horse racing permits issued by the Ohio state racing commission may manage a telephone account wagering system for the purpose of keeping telephone deposit accounts and accepting telephone wagers." Ohio Admin. Code § 3769-3-32(A). The tax structure is the same as with live pari-mutuel wagering. Ohio Admin. Code § 3769-3-32(L).
Wagering on the Internet is also deemed legal, according to a 2002 Ohio Supreme Court case. State ex rel. Heartland Jockey Club, Ltd. v Ohio State Racing Comm., 2002-Ohio-7365.
In 1992 the federal government enacted the Professional and Amateur Sports Protection Act, 28 U.S.C. § 3701, (PASPA). PASPA prohibits state governments from allowing sports betting, with limited exception for states that had previously authorized sports wagering. Ohio does not fall within the PASPA exception. Bookmaking, defined as "the business of receiving or paying off bets," is expressly prohibited in the state. Ohio Rev. Code §§ 2915.01-02.
A sweepstakes operates in a similar fashion to a lottery in that a prize is awarded on the basis at least in part on chance, but the element of consideration is removed. Consideration is a legal concept of value. To qualify as a sweepstakes, therefore, a person cannot be required to give what the law sees as value for a chance to win a prize, for if value is perceived, the sweepstakes would be a lottery. Different states attach different meanings to value in the context of gambling.
In Ohio, the laws are unclear about whether sweepstakes are illegal or not. The General Assembly is considering legislation to solve the confusion surrounding sweepstakes.
There are currently no tribal-state compacts authorizing gaming in Ohio.
Ohio Revised Code Chapter 2915
Ohio Revised Code Chapter 3769
Ohio Revised Code Chapter 3770
Ohio Revised Code Chapter 3772
Tel: (614) 466-2757Ohio Lottery Commission
Frank J. Lausche Building
Tel: (800) 686-4208
Tel: (855) 800-0058
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