Taking bets: What will sports gambling mean for Miami Valley businesses?

Demetri Zavakos, manager of Victory Lanes bowling alley in Springfield, describes how sports betting will work on an Ohio Lottery kiosk in the alley Thursday. BILL LACKEY/STAFF

Credit: Bill Lackey

caption arrowCaption
Demetri Zavakos, manager of Victory Lanes bowling alley in Springfield, describes how sports betting will work on an Ohio Lottery kiosk in the alley Thursday. BILL LACKEY/STAFF

Credit: Bill Lackey

Credit: Bill Lackey

Some Miami Valley businesses are looking forward to applying for licenses for sports gambling, which could be a boon for sports bars, bowling alleys and restaurants that have struggled since the pandemic started.

The area bowling proprietor’s association met last week, and there was “some excitement” at the prospect of sports betting, said Demetri Zavakos, general manager of Victory Lanes in Springfield. The Zavakos family also owns Royal Z Lanes in Wilmington.

“Being a part of it is much better than not being a part of it,” he said. “I think it depends kind of how they roll it out.”

Lawmakers, led by state Sen. Niraj Antani, R-Miamisburg, earlier this month approved legalizing sports betting in Ohio. The state estimates that sports betting will be a $1.1 billion industry in Ohio in its first year or so of operation, growing to $3.35 billion within a few years.

Regulators now are working on how the roll out will work next year.

“Are we interested? Yes, very much so,” said Joe Poelking, owner of three Poelking Lanes locations in Dayton. “We’ve been working on this for a number of years. We’re glad to be included in this as a small business.”

Each Poelking Lanes location has a bar that serves regular bowling customers, people there for other events, or just those socializing with friends, he said. They have multiple TVs, so several sporting events can be watched at once — and customers will probably want to bet on those, Poelking said.

“If we’ve got the kiosks there where they can go ahead and make those wagers, that’s a plus for us,” he said. Poelking Lanes got a “big spike” from installing KENO machines, and any other amenity that can keep customers happy is helpful, Poelking said.

Now state regulators need to make sure all applicants are treated fairly, he said.

“We would love to see it come sooner than 2023,” Poelking said.

But Derek Longmeier, executive director of the Problem Gambling Network of Ohio, is concerned the legalization will lead to more gambling addictions.

“This is certainly the biggest expansion of gambling that Ohio has ever seen,” he said.

What’s happening?

Completing years of debate on various sports gaming proposals, the General Assembly approved a merger of rival House and Senate bills on Dec. 9 to legalize it.

Bets will be allowed on professional sports, college sports and esports teams, but betting on horse racing will remain confined to established pari-mutuel betting at racetracks.

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The Casino Control Commission is working on rules, but that could take up to six months; and license applications are unlikely to be accepted until summer or fall of 2022.

“We have a lot of rules that need to be drafted,” said Jessica Franks, commission director of communications. Application forms are being written, too, she said.

“We will make those available as soon as they’re ready to go,” Franks said.

The casino commission executive director can grant applicants a provisional license for up to three months, which can be renewed once; but all those would expire June 30, 2023.

“All types of sports gaming must be allowed to start at the same time,” no later than Jan. 1, 2023, according to a presentation on the issue given at the casino commission meeting Dec. 15.

“I have great confidence that the Casino Control Commission will move expeditiously in their rule-making process so that the first bet can be as soon as possible, while also doing this in a fair and careful manner. I think we could see the first bet by the World Series,” Antani said. The World Series takes place in October.

Antani’s Senate Bill 176 passed the upper house in June. It was merged with Substitute House Bill 29. The House bill started as an expansion of the veteran ID card program, with sports betting language added later.

What’s in the law?

Three types of licenses will be issued for sports betting, according to the casino commission and legislative comments.

Type A licenses: These licenses are intended for professional sports organizations and existing casinos, likely in partnership with a sportsbook company to manage betting.

Up to 25 Type A licenses can be issued for online betting or smartphone apps, but those applicants must also hold a Type B license and have a physical business in Ohio. An initial Type A license will cost professional sports teams $1 million, plus $2 million for the sportsbook partner. Other applicants, such as casinos, would pay at least $1.5 million to start and their betting management partners would pay at least $1.5 million.

“The 25 Type A licenses will be competitively bid, but certainly can go to the sports teams as well as casinos and racinos,” Antani said. “All of the license numbers were calculated to ensure there was plenty of opportunity and competition for them.”

Type B licenses: These license can be issued for up to 40 brick-and-mortar facilities with betting terminals and windows. Those facilities, allocated according to county population and economy, may partner with one betting management company. They’re expected to mostly be at existing casinos and racinos.

If an applicant also has a Type A license, a Type B license would cost $140,000 to start. All other applicants would pay $90,000. If they partner with a betting management company, that company would be charged the same as the applicant.

Antani said he believes the number of Type B licenses could be increased.

Type C licenses: These licenses can be issued to up to 20 companies for self-service or clerk-operated individual gaming kiosks — but those companies can install kiosks in an unlimited number of bars, bowling alleys and restaurants with liquor permits. The kiosks would have limits on betting amounts.

The kiosk-installing companies would pay $100,000 for their first five-year license, but the individual businesses getting those kiosks would only pay $1,000 for a three-year license.

Who could get licenses?

Montgomery County could have up to three locations for Type B licenses. Warren could have two. Butler, Clark, Greene and Miami could each have one, according to the casino commission presentation.

Two racinos exist in the Miami Valley area: Hollywood Gaming Dayton Raceway in Montgomery County and Casino Lebanon/Miami Valley Gaming in Warren County. Neither responded to requests for comment.

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Ohio’s professional sports teams, NASCAR and PGA, four casinos and 11 racinos would be eligible for Type A and B licenses.

“The teams would not be involved in the day-to-day operations of the sports betting platforms,” according to the Ohio Professional Sports Coalition. That group, representing the state’s eight major-league sports franchises including baseball, football, basketball, hockey, soccer and golf, released a statement supporting a gambling framework for major-league events that roughly matches the final bill.

“In addition to hosting pre- and post-season games and other special events, members of the Ohio Professional Sports Coalition play close to 570 games, home and away, each year,” the group said.

Twenty-six states have legalized sports betting and 21 more are considering legislation, according to the OPSC.

“In most of those states, big casino operators quickly seized control, but recent legislation has given direct access to sports teams,” the group said.

Ohioans are already betting on sports in neighboring states or illegally via offshore platforms, according to the statement.

What about the money?

Once it’s fully operational, sports betting will put tens of millions of dollars into state coffers each year, according to a Legislative Service Commission analysis.

The bill imposes a 10% tax on sports gaming receipts. Of that, 98% will go to fund public and nonpublic education through General Assembly appropriations, with half to go on sports and other extracurricular activities.

The remaining 2% will go to programs to combat gambling addiction.

That is something Longmeier of the Problem Gambling Network of Ohio, appreciates.

“We know the more opportunities there are to gamble, the more people will be impacted,” he said.

A 2017 survey by the Ohio Department of Mental Health & Addiction Services, the most recent one available, found that one-fourth of sports bettors are at risk of developing a gambling problem, compared to one-tenth of those who gamble on other things, he said.

Longmeier is especially concerned about the ability to bet via smartphone app, making it quick and easy anywhere and anytime.

He expects an exponential influx of increase in calls to the problem gambling hotline, based on the effects of sports betting in other states. This week Longmeier talked to 25 counselors about getting certified to handle gambling problems, and the network is recruiting more counselors, he said.

“One of the benefits of this bill is the delay in implementation,” Longmeier said.

Longmeier said the Problem Gambling Network will seek to require employee training on recognizing gambling problems for anyplace that has sports betting machines. That may be as simple as knowing the helpline number.

He hopes to have the helpline number appear on smartphone gambling apps, perhaps popping up when someone exceeds a set spending limit.

The gambling helpline is available 24/7 at 800-589-9966, or online at www.Beforeyoubet.org.

Who will do it?

Zavakos of Victory Lanes is “absolutely interested” in applying to have sports betting kiosks at his bowling alleys if the fee is reasonable. He believes they’ll be less work to handle than existing lottery machines — and if software can be added to current terminals there may not even be a need to get new ones, he said.

Restaurants will see sports betting kiosks as a way to get people to stay a little longer, and perhaps order more, said John Barker, president and CEO of the Ohio Restaurant Association.

“We have a portion of our membership that is very interested in this,” he said. “They see it as a nice opportunity to add an element of entertainment to their business.”

Barker doubts fast-food places would install sports betting machines, but restaurants that already have a sports theme probably would. Some hotel bar restaurants likely would, too, he said.

The important thing is that the law doesn’t limit sports betting access to major corporations; the Type C licenses are affordable for small businesses, Barker said.

“This is what consumers want,” he said. Sports betting could “fit in nicely” at independent restaurants.

“It could be a real game-changer for somebody like that,” Barker said.

That might include Pohlman Lanes & Family Entertainment Complex in Hamilton, which includes Scott’s Bar & Grill.

“I’m sure we will have plans to do it,” manager Joe Hoelle said. “I think it would bring people in.”

But he’s waiting to hear details, such as whether the kiosks would require more staff, he said.

Hoelle has already heard customers mention sports betting, and expects some of the patrons who use the business’ KENO lottery machines would use sports kiosks, too. He hasn’t heard whether other local businesses are also interested, but knows area residents are already spending gambling dollars elsewhere.

“We’re not that far from Lawrenceburg, Indiana, so there’s a lot of folks from this area that make the trip over to Lawrenceburg,” Hoelle said. Hollywood Casino in Lawrenceburg is less than an hour southwest of Hamilton.

David Corey, executive vice president for the Bowling Centers Association of Ohio trade association, said he lobbied for years against other sport betting proposals that would have kept it entirely in the hands of existing gambling operators.

“The bowling centers and local businesses in Ohio have been shut out of the gaming industry since day one,” he said. Corey expects many small operators will seek licenses, hoping to attract and keep customers as they did with KENO lottery machines. “The gaming pie is so big, and all we wanted was a little piece,” he said.

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