Ohio’s $3.7B Unregulated iGaming Market Eyes Legalization for Education Funds

A New Revenue Play

Representative Brian Stewart, a Republican from Ashville and House Finance Committee chair, is crafting a bill to legalize iGaming in Ohio, letting residents play casino games like poker and slots on phones or laptops.

The goal’s clear: rake in cash for the state without hiking taxes. After Republicans axed Governor Mike DeWine’s proposed tax increases on sports betting, marijuana, and cigarettes from the 2025-2027 budget, Stewart’s bill offers a fresh revenue stream.

A July 2024 report from the Study Commission on the Future of Gaming in Ohio, set up two years ago, backs the move, noting “significant increases to tax revenues” in states with legal iGaming.

“These tax revenue benefits to the state and funding that could be provided to our K-12 education system cannot be overlooked,” wrote Reps. Jeff LaRe, Cindy Abrams, and Jay Edwards.

Tapping a Massive Market

Ohio’s iGaming push targets a hefty unregulated market. $3.7 billion flowed to unlicensed operators from Ohio users last year, per one report.

Legalizing could redirect that cash to regulated platforms, with tax rates like Michigan’s 20-28% or Pennsylvania’s 54% on slots potentially yielding $500 million to $650 million annually.

The commission found iGaming doesn’t gut brick-and-mortar casinos but expands the market by drawing new players. Stewart’s bill, still under wraps, aims to protect Ohio’s four casinos and seven racinos while capturing black-market revenue.

“With the right regulatory framework, these types of gaming can thrive with nominal impact to our current system,” the commission report stated. Education funding, especially K-12, could see a big boost, giving the bill extra hype.

Industry Pushback and Past Hiccups

Not everyone’s on board. Ohio’s casinos and racinos, like JACK Cleveland Casino and MGM Northfield Park, worry online platforms could siphon in-person traffic.

JACK Entertainment’s Matt Reinhard told lawmakers, “iGaming will damage Ohio businesses and cost Ohio jobs.” But PENN Entertainment, running four state properties, supports iGaming, seeing it as complementary.

A prior attempt by ex-Senator Niraj Antani in 2024 fizzled, with his bill tying licenses to the state’s 11 gaming venues stalling in committee.

Stewart’s timing is sharper, aligning with Senate budget talks ending May 8, 2025, at 6:00 PM CT. Still, concerns linger. Commission members flagged potential problem gambling spikes, with Derek Longmeier of the Problem Gambling Network of Ohio noting, “The more access there is to gambling opportunities, the more people are going to need support services.”