Ohio Daily Fantasy Sports Bill Likely to Become Law

Image credit: Jim Bowen

The Ohio legislature has approved a daily fantasy sports bill that will legalize and regulate fantasy contests if signed by Governor John Kasich. If the governor signs off on the bill, daily fantasy operators such as FanDuel and DraftKings will be required to apply for a license and follow regulations in order to operate in Ohio moving forward.

Update: Governor Kasich signed the bill into law on Friday, December 22nd. Ohio is now officially a fantasy-friendly state.

The major daily fantasy sites have been active in Ohio for years now, but HB 132 will give them official legal status in addition to requiring all operators adhere to standard consumer protection measures.

Ohio DFS Regulations

Under HB 132, the Ohio Casino Control Commission will be given regulatory, licensing and enforcement authority over DFS sites operating in the state. The legislation gives the Commission authority to determine licensing fees as long as the fee does not exceed $10,000 per year or $30,000 for a three-year period.

The Commission is also powered with the ability to adopt rules to ensure fantasy sites comply with the following regulations:

  • Prohibit individuals under the age of 18 from participating
  • Allow customers to voluntarily self-exclude themselves from playing
  • Ensure DFS operators segregate players’ funds from operational funds
  • Ensure DFS operators comply with all state and federal privacy requirements
  • DFS operators must maintain extensive records and submit to audits
  • DFS operators prohibited from offering contests “on any kiosk or machine physically located in a retail business location”
  • DFS operators must prohibit the use of scripts that are not readily available to all customers
  • DFS operators must not hold contests based on “any university, college, high school or youth sporting” events

Ohio fantasy sites will also be subject to basic advertising standards prohibiting them from running deceptive or misleading ads, and from targeting minors or people who have self-excluded.

Overall, HB 132 looks like a fairly standard DFS bill that should not impact business for sites already operating in the state. The $10,000 per year licensing fee is a bit on the high side and might push out some smaller operators. However, HB 132 imposes no additional taxes on fantasy operators. That makes Ohio one of the more fantasy-friendly states.

The bill also exempts small office pools and other games where 100% of the money collected is distributed back to the players. HB 132 specifically targets commercial daily fantasy sites. Your casual contests with friends and co-workers will be unaffected.

Little Change on the Ground, But Still an Important Development

The passage of this bill will not change much on the ground, but it is still a much-welcomed development for operators. Last year, State Senator Bill Coley introduced a piece of legislation that would have reclassified daily fantasy contests as “schemes of chance.”

If Senator Coley had been successful in getting SB 356 made into law, it would have destroyed the DFS business model. Classifying DFS games as games of chance would have made it illegal to run fantasy games for a profit. Under his bill, fantasy contests would have only been illegal if 100% of entry fees were distributed as prizes in every contest. That bill fortunately died in committee last year.

HB 132 passed the Ohio legislature on Tuesday and has been sent to the Governor’s desk. All that’s needed for the bill to become law is for Governor Kasich to sign off on the bill. Gambling Compliance reports the bill is likely to receive the Governor’s signature and become law.