Ohio Pursues Online Casino Legalization With Land-Based Promotion Requirement

Ohio's stalled efforts to legalize online casinos may finally gain traction through a novel regulatory approach proposed by State Rep. Brian Stewart. Rather than allowing iGaming operators to deploy traditional deposit bonuses and promotional incentives, Stewart's draft legislation would require online casino promotions to be structurally linked to driving foot traffic to the state's existing land-based gaming properties, including casinos and racinos.

This tethering strategy represents an attempt to reconcile competing stakeholder interests that have previously deadlocked iGaming discussions in the state. By ensuring that online expansion directly supports brick-and-mortar venues already operating in Ohio, the proposal aims to secure backing from land-based operators who might otherwise view internet gaming as direct competition. Simultaneously, it allows the state to capture the significant tax revenue that online casinos generate while addressing concerns from established gaming businesses about cannibalizing their customer bases.

Rep. Stewart presented the framework during an iDevelopment and Economic Association panel, emphasizing that Ohio's existing casinos and racinos have already invested substantially in local economies and communities. Restricting online licenses to these incumbent operators creates a vertically integrated model where digital growth theoretically reinforces rather than replaces physical gaming traffic.

The financial incentive for passage is substantial. Stewart estimates that online casinos could generate approximately $400 million in annual tax revenue for the state - a significant windfall compared to Ohio's sports betting sector, which has collected $600 million in total tax revenue since launching on January 1, 2023. Online casinos typically represent the largest tax contributor within gambling verticals due to their ability to drive elevated player spending and sustained engagement.

However, responsible gambling advocates have raised concerns about the expansion. Derek Longmeier of the Problem Gambling Network of Ohio has warned that increased availability of online gambling could amplify harmful play, particularly during high-interest betting periods like the NFL season. The removal of traditional promotional bonuses may theoretically mitigate some player acquisition intensity, though industry evidence suggests bonuses remain a primary driver of problem gambling behavior.

The timing of this legislative push is politically significant. Gov. Mike DeWine may leave office before online casino regulation is finalized, with midterm elections approaching and new gubernatorial candidates already emerging. Notably, some political rivals appear more favorable to iGaming expansion, suggesting that the window for passage may narrow or widen depending on electoral outcomes.

Ohio's proposed approach of coupling online expansion with land-based traffic generation is relatively uncommon in US jurisdictions that have legalized iGaming. Most regulated markets allow online operators to compete independently on digital channels. This hybrid model deserves close observation as a potential template for other states seeking to balance incumbent gaming interests with new revenue opportunities.