CINCINNATI — The Ohio Lottery Commission is getting some pushback on the payment rules it established for bars and restaurants that want to install sports betting kiosks when Ohio launches its newest form of gambling January 1, 2023.
At issue is a requirement that “prizes will be paid in cash from the host's proceeds of their sports gaming sales.” Critics say it will force business owners to keep dangerous levels of cash on hand to pay off winning bets.
“It will be known who has these permits, who’s able to do sports betting,” said Chris Ferruso, Ohio legislative director for the National Federation of Independent Business. “If they’re sitting on tens of thousands of dollars in cash, they’re a target for robbery.”
Ferruso said many of his members are worried about the rule. He thinks it should be revised to let any lottery retailer cash in winning bets – not just the bar where the bet was made. That would spread the risk among thousands of lottery retailers.
“I think that was the spirit and intent of the legislature,” Ferruso said. “My understanding was the intent was to allow that to take place, so that folks who weren’t eligible to have a Type C license could still participate in the process. A lot of folks that purchase lottery tickets today at an establishment don’t necessarily go back to that same establishment in order to cash that ticket.”
Ohio lawmakers authorized three kinds of sports betting last December, including kiosk bets regulated jointly by the lottery and Ohio’s Casino Control Commission. Lottery officials have pre-authorized more than 1,000 Ohio businesses to host sports betting kiosks with a Type C license. The Casino Control Commission has received applications from seven companies that want to be sports book proprietors. Their software would process the actual bets and validate winners with a credit voucher that can be redeemed for cash.
Lottery spokeswoman Danielle Frizzi-Babb said the payment rule is based on language in the sports betting statute, which allows for betters to receive payments “in cash at any Type C sports gaming host.” But lottery officials are working through the state rulemaking process to determine if revisions are needed.
“For security purposes, the rule clarifies that payments in-cash at a host should be of $600 or less, just like current practices with traditional lottery prizes,” Frizzi-Babb said. “However, it should be noted that this is not a mandatory requirement and hosts may choose to limit the amount of prizes they’re willing to cash.”
Ohio’s Joint Committee on Agency Rule Review, or JCARR, has an Aug. 17 meeting where the rules are likely to be discussed. In advance of that meeting, Rep. Bill Seitz, R-Green Township, urged Lottery Director Pat McDonald in a July 13 email to “consider withdrawing the proposed rules and replacing them with proposals advanced by the relevant stakeholders.” He also suggested JCARR might be forced to invalidate the lottery’s rule and delay the launch of Ohio’s sports betting industry.
In a separate email to WCPO, Seitz said he doesn’t think a delay is likely. Lottery officials and the Casino Control Commission said the launch date remains Jan. 1. But Seitz continues to push for a rules change on payments.
“The legislation we passed envisioned that winning ticket holders could take their winning ticket to any authorized lottery retailer to cash it,” Seitz wrote. “This was of some help to the lottery retailers because they earn a small commission when they cash any winning ticket.”
