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21st of May 2018

Politics



Sports betting is a big deal, but could amount to few new tax dollars for Ohio

CLEVELAND, Ohio - Making sports bets legal at Ohio's casinos wouldn't by itself amount to much in new tax revenue for the state, if Nevada is any example.

Nevada, the gambling capital of America, collected less than $20 million in taxes from sports bets last year.

"I think the number that gets everyone excited is the amount that gets wagered. It's a large number. In 2017, it was $4.9 billion (in Nevada), but casinos only won $248.8 million of that. It's a low-margin business," said Michael Lawton, senior research analyst for the Nevada Gaming Control Board.

The casinos' winnings are taxed at a top rate of 6.75 percent in Nevada.

The possibility of sports wagering in Ohio and every other state became a reality Monday with a ruling from the U.S. Supreme Court.

Ohio currently keeps about one-third of the money won by the house at slots and table games -- either through tax money from the casinos or Ohio Lottery Commission shares from the racinos.

Ohio gambling revenue totaled just over $1.7 billion last year. So if sports wagering amounted to 2.2 percent in Ohio, like it does it Nevada, it would translate to just under $40 million in revenue.

This would generate about $13 million in taxes or lottery proceeds, if taxed at the same one-third rate, enough to cover part of the cost of one new high school.

For comparison, Ohio's budget is roughly $35 billion a year.

Generating more money per bet are table games like craps and 21, where the casino typically keeps close to 15 percent of the money wagered, Lawton said. In comparison, the house keeps about 5 percent of the sports wagers in Nevada.

But, Lawton said sports wagering generates related business.

"In Nevada, it's an ancillary piece to our total gaming revenue," Lawton said.

"Sports betting is important to Nevada. I can't quantify for you how important it is. Those numbers make it look very, very small. But people who come to play sports, are going to go to shows, play other games, play slot machines."

Ohio's casino operators have had little to say publicly in the reaction to the Supreme Court ruling, other than they support expansion of sports gambling in Ohio.

But Penn National, which operates racinos and casinos under the Hollywood brand, seemed to acknowledge in a statement on Monday that slot machines would remain the biggest generator of money.

"Sports betting could be another amenity at our Hollywood properties and help generate additional visitation, as well as drive incremental tax revenue for Ohio,"  the Penn National statement said.

Bookmark cleveland.com/casino for complete casino coverage.

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