Ohio Mulls Two Bills That Would Make Online Casinos Legal

Ohio lawmakers have introduced two distinct pieces of legislation, House Bill 298 (HB298) and Senate Bill 197 (SB197), each aiming to legalize online casino gaming but differing significantly regarding the regulation of sweepstakes casinos.

House Bill 298, recently introduced by Republican State Representatives Brian Stewart and Marilyn John, could transform Ohio into the next state to embrace regulated online casino gaming. This legislation specifically targets online casino-style gambling, such as virtual slot machines, digital card games, dice, and other games based on random outcomes.

Under HB298, online casino operators would face a substantial 28% tax rate on their gross receipts. Additionally, operators would need to secure licenses costing an initial $50 million fee, with annual renewal fees of $10 million. Suppliers providing internet gambling equipment and technology would also require licensing, set at $100,000 plus a $50,000 application fee.

Senate Bill Allows Licensing for Sweepstakes Casinos

Crucially, HB298 explicitly prohibits the operation of sweepstakes casinos unless these platforms undergo full regulation and licensing. Currently, unregulated sweepstakes casino activities exist in Ohio, and this legislation could effectively ban these operations unless officially sanctioned.

Conversely, Senate Bill 197, although also aimed at legalizing online casino operations, differs notably by potentially allowing regulated sweepstakes casino apps within the state's gaming framework. This provision could open opportunities for a broader range of digital gambling products compared to HB298.

Both bills stipulate stringent licensing procedures, limiting potential licensees primarily to existing Ohio casino operators or horse racetrack owners.

Constitutional Challenges Could Emerge if Online Casinos are Legalized

However, significant constitutional questions remain. Ohio's constitution, under Article XV, Section 6, currently restricts casino gaming to just four physical locations and permits only charitable bingo otherwise. The Ohio Supreme Court has not yet reviewed the constitutional validity of extending gaming laws through legislative interpretation as these bills propose. Legal challenges may arise questioning whether the bills redefine gaming law rather than establish entirely new regulations.

HB298 sets a clear timeline for the implementation of an online casino market, mandating its launch no later than March 31, 2026. Revenue generated would predominantly support Ohio’s General Revenue Fund, receiving 99% of proceeds, with the remaining 1% dedicated specifically to addressing problem gambling.

The future of Ohio's online gambling landscape remains uncertain, hinging on legislative outcomes and potential judicial scrutiny, as fewer than ten states currently permit online casinos, despite widespread adoption of legal online sports betting in nearly 40 states.

Neighboring States Have Legal Online Casinos

Pressure may be mounting on Ohio to pass an iGaming bill. That's because neighboring states Michigan, Pennsylvania, and Ohio have legal online casinos.

In Michigan, according to Ryan Soultz, Vice President of Governmental Affairs for Boyd Gaming, more than $260 million was generated in tax revenue from online casino play in 2024. Estimates from industry watchdog groups predict Ohio could gather in as much as half a billion annually within two years of legalizing iGaming.

Online casinos favor the house more than online sportsbooks. That's why states with legal iGaming apps are raking in tax revenue that dwarfs the amount taken in by online sports betting apps. However, there is concern by some that allowing slots and casino table games on mobile devices would be too tempting for individuals with gambling problems.

Last week, the Ohio Senate Select Committee on Gaming held a public hearing and welcomed comments from several guests on the possibility of legalizing online casinos.

Scott Ward of the Sports Betting Alliance pointed out that "casinos in your pocket" are already available in Ohio, where many offshore betting apps and so-called sweepstakes casino apps are available.

Ward also argued that a ban on sweepstakes casinos and legalization of regulated online casinos would effectively “stamp out illegal iGaming in the state.”

Online sweepstakes casinos allow consumers to play without uploading real money placed at risk. Instead, they wager in slots and casino table games using coins, tokens, or some other non-real money currency. If they win, those tokens or coins can be redeemed for prizes or cash.

According to Ward, as much as $5 billion is wagered annually currently in Ohio with illegal offshore casinos apps or sweepstake apps that are unregulated.

Public comment may be submitted later to the same committee. For now, the Senate Bill is in committee and awaits discussion on the floor at large and a possible vote. Governor Mike DeWine is in favor of legal online casinos, but has expressed concerns over underage gambling.