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Michigan’s online sports betting launch hailed a success, Ohio could follow this year

Published: Apr. 16, 2021 at 10:37 PM EDT
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TOLEDO, Ohio (WTVG) - The sports gambling rollout in Michigan has been a home run.

Gov. Gretchen Whitmer signed legislation legalizing sports betting in December 2019. In-person betting began on March 11, 2020, days before the pandemic shut down casinos. But at the end of January 2021, the bets went mobile just in time for the super bowl.

“We knew there was going to be a big appetite for sports betting,” said Michigan Gaming Control Board Executive Director Rick Kalm.

He said the state’s sports betting handle in February, or the total amount of money wagered, was $300 million. It resulted in $25 million in revenue for the state during its first full month capitalizing on mobile sports revenue. Online casino-style games make up a majority of the profits.

March’s numbers haven’t been finalized, but Kalm anticipates even higher figures following the NCAA Men’s Basketball Tournament.

“We sort of anticipated that we were going to get this kind of response,” Kalm said. “So far, we’ve been really pleased to see the revenue we’ve been generating.”

He attributed much of that success to the state’s coordinated launch. There are currently 12 operators and platform providers in Michigan with three more going through the regulatory process. Nearly all of the ones currently operating launched on the same day, setting the online gaming and sports business in the state off on the right foot.

Michigan regulators also modeled many of its rules after some of the states where sports betting had already been legal, including Indiana, Pennsylvania and New Jersey.

“Those rules were already recognized by those platform providers because they’re already licensed in many of those states,” Kalm said.

In February, the first full month that online sports betting was legal in Michigan, $300 million in wagers were placed....

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Michiganders aren’t the only ones taking advantage of the state’s legal wagering platforms.

Northwest Ohioans have crossed the border to place bets in large numbers, according to geolocation data presented to the General Assembly.

The company GeoComply verifies a user’s location who is trying to place a sports bet on a mobile app or computer. For the first four days of the NCAA Men’s Basketball Tournament in 2021, the company told lawmakers in written testimony on March 31 that it performed nearly 900,000 geolocation checks within 10 miles of Ohio’s border. It concluded that Ohio residents are regularly crossing the border into Michigan, Indiana, West Virginia and Pennsylvania to place online sports bets.

Data collected by the company GeoComply shows where geolocation transactions occurred within 10...
Data collected by the company GeoComply shows where geolocation transactions occurred within 10 miles of Ohio's border for people making sports bets.

Kentucky is Ohio’s only neighbor without legal sports betting. It’s legal and operational in 21 states plus Washington D.C., according to the American Gaming Association. It’s also legal in six states where it’s not yet operational.

“The dollars are definitely flowing out of Ohio,” said Matthew Waters, who writes about sports gambling legislation for the website Legal Sports Report. “There are a couple of states that have been dragging their feet on sports betting and Ohio is one of them”

A bill that would have legalized sports betting didn’t pass in the General Assembly in 2020. Lawmakers have held multiple hearings this year in hopes of introducing another bill to push sports betting legalization to the finish line in the state. They could introduce a bill as early as next week.

Representatives from Ohio’s professional sports teams have testified in committee hearings in favor of legalization. On March 17, Columbus Blue Jackets Chief Operating Officer Cameron Scholvin told members of the Senate Select Committee on Gaming, “Time is of the essence.”

“Tax revenues and economic impact are already being lost,” Scholvin said. “An estimated $130 billion per year in sports gambling is already happening illegally in this country. Ohio residents can cross the border into neighboring states...to place legal sports bets to gamble on our games, driving tax revenues and economic impact to other states instead of right here in Ohio.

“Passing sports gambling legislation will result in millions of dollars per year in tax revenue. Given the pressure on state budgets, how can we ignore the opportunity to capture these revenues and alleviate some of the burdens on Ohio’s taxpayers?”

Ohio Gov. Mike DeWine has previously said he has little doubt that legal sports betting is coming to the state.

“Sports gaming is already in Ohio,” he said at a March 1 COVID-19 briefing. “Ohio is just not regulating it. This is something that, I think, is inevitable.”

It’s unclear how much money is being wagered at offshore sportsbooks in Ohio, Waters said. He also said studies have shown many people can’t tell the difference between a legal offshore gambling website and legal ones.

“You’re not going to win everybody. Some people are just going to be happy with the book they’ve been with for years,” Waters said. “But you’re going to get enough people to make a difference, for sure.”

He also said it’s easier to track peoples’ spending habits on regulated apps to identify potential problem gamblers.

That’s something Kalm said is the most concerning aspect of Michigan’s sports betting rollout.

“When you make it this convenient, and it’s a phone app away, we’ve had increases in calls to our problem gambling hotline,” Kalm said. “We’re watching closely to make sure we have the tools necessary to limit people to limit themselves and their gambling.”

Something industry insiders and plenty of Ohio State Buckeye fans are watching for when lawmakers introduce their bill in Columbus is if people will be able to place bets on college athletics.

It’s legal in Michigan, but only for certain Division I sports. Prop bets on individual athletes aren’t allowed in Michigan.

Last General Assembly, the bills in the legislature did allow bets on college sports. The Inter-University Council of Ohio is against that idea.

“We believe that it jeopardizes the welfare of student-athletes and the intercollegiate athletics community,” Bruce Johnson, the IUC’s president, testified to lawmakers.

Each state is different when it comes to what they allow in the arena of college sports betting. Oregon doesn’t allow bets at all on college games. New Jersey doesn’t allow bets on teams from the state.

“When states roll out legislation, it’s becoming normal for some kind of restrictions on college games,” Waters said. “It’s an expectancy now to see some sort of limitations on college sports.”

Michigan hasn’t had any problems with colleges or universities in the short time sports betting has been legal.

“We’ve done some outreach with the Division I teams at our schools. That outreach is going to continue,” Kral said. “We’re going to monitor that situation, but so far, we haven’t had an issue.”

As for Ohio, Waters said it didn’t initially seem like Ohio would be this far behind other states. But this year, he believes lawmakers will finally cross the finish line.

“Especially when you have so many states on your borders where those tax dollars are going, for that reason alone, Ohio will get something done this year,” he said. “I think everybody is going to get on board this year.”

Sports betting is legal in half of the states in the country, including in all but one of Ohio's neighboring states. It'...

Posted by Josh Croup on Friday, April 16, 2021

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