The Ohio Lottery has revised and modified its rules on cashing in sports bets, making it easier for winners to receive their prizes at any lottery retailer. The changes were introduced in response to complaints that the previous rules would have forced bars and restaurants, which are set to join the market upon launch on January 1, to keep too much cash on hand, putting them at risk for robbery.
“We have clarified Rule 3770:3-8-02 to make explicitly clear that Type C proprietors may allow non-host locations (all lottery retailers) to cash sports gaming prizes if they choose to do so,” Lottery Director Pat McDonald wrote to Ohio General Assembly members, according to WCPO. “This was always the Lottery’s intention but is now clarified in rule to avoid stakeholder confusion on this issue.”
Bars and restaurants are among the parties Ohio lawmakers authorized to conduct sports betting operations last December. Kiosk betting is set to be regulated jointly by the lottery and the Ohio Casino Control Commission (OCCC). Lottery officials have already pre-authorized more than 1,100 businesses in the state to host sports betting kiosks through a Type C license.
As for the Casino Control Commission, it has received applications from seven companies that want to be sportsbook proprietors, reports WCPO. Their software would process the actual bets and validate winners with a credit voucher that can be redeemed for cash.
Holy Grail Tavern & Grille at the Banks, an Ohio bar seeking to offer betting
Advocates of retail, including the National Federation of Independent Business, argued the lottery should “spread the risk” for bars and restaurants by allowing all of the roughly 10,000 Ohio Lottery retailers cash winning bets, and not just the 1,000+ who signaled an interest in hosting sports betting kiosks.
In his memo to state lawmakers, Director McDonald said winning sports bets will also be redeemable in person at lottery offices and via mail, further reports the cited source. In addition, wagers might also be payable through the existing super retailer program and cashing application on the MyLotto Rewards app.
The Ohio Lottery Director also addressed criticism that sports betting posed a robbery risk for bars and restaurants. “There is no minimum cash amount required for hosts to have on-hand,” he wrote. “Hosts may choose to limit the value of prizes they are willing to cash.”
Additionally, McDonald warned about “significant technical and practical challenges” to expanding the cashing options for sports bettors, stating that the process of verifying the validity of sports betting vouchers could eat away at lottery profits.
“In looking at other states' sports betting programs, type C sports gaming might only generate a few million dollars per year. This is a fraction of traditional lottery profits,” said. “We need to be mindful of these financial realities when being asked to consider additional commissions to non-host locations for cashing winning tickets. Those additional costs would decrease profits and could eliminate them completely.”
As of August 5, more than 1,000 bars and restaurants –but also bowling alleys and even grocery stores– across the state had applied to host sports betting kiosks. Ohioans are expected to wager millions of dollars on sports per year, and while the bulk of these bets will be placed via mobile apps, small businesses are seeking to earn their slice of the pie.
Ohio Casino Control Commission Executive Director Matt Schuler
Ohio Casino Control Commission Executive Director Matt Schuler has said he expects around 2,000 small businesses to apply. While they must have the lottery’s recommendation and the OLC will manage the kiosk portion of the sports betting enterprise, applicants will still need to have their licenses approved by the OCCC.
Wagering opportunities on retail kiosks will be limited to the standard bets on sporting events, with parlays available, but capped at four legs. Bettors will also be limited in how much they can bet through the kiosks, with the law stating no one can bet more than $700 per calendar week through either self-serve machines or kiosks operated by a clerk at the establishment.
Elys Game Technology became last month the first company to apply for a Type C license in Ohio. The firm is seeking to expand its small establishments model, which it first launched in the U.S. last year, in D.C. This has proven to be a successful strategy thus far, and Elys opened its 4th and 5th white label sportsbooks at two Washington DC restaurants and bars in June.
In conversation with Yogonet, Elys Chairman Mike Ciavarella discussed the upcoming Ohio market. The executive said that given gross gaming revenue for the state could potentially reach $300 to $400 million in its first full year, the opportunity is one the company “could not ignore.”
“Ohio legislators took a view that makes a lot of sense in the sports betting business. This wide range of distribution gives sports bettors multiple options for placing their bets and closely replicates the European landscape,” Ciavarella added. “This strong relationship with Elys’ origins [in Italy] and experience raises our expectations of successfully capturing a significant slice of the market in Ohio.”