The Ohio Legislature’s Joint Committee on Gaming and Wagering, which was created to study the gaming environment in Ohio, released a report addressing several issues.

The issue drawing the most attention was Ohio’s practice of not taxing promotional spending at the casinos and racinos, which has amounted to $650 million since the first casino opened in 2012. Ohio is one of only nine states that do not tax promotional spending. The committee strongly urged lawmakers to cease this practice.

The gaming industry has argued that such freebies are needed to attract more paying customers, but an analysis of spending and revenue since 2012 didn’t support this claim. The gaming industry also argued that such a tax would put Ohio at a disadvantage with neighboring states. However, only Pennsylvania allows tax-free promotional spending. Michigan taxes all promotional spending. Indiana, Kentucky and West Virginia cap their tax-free promotional spending.

Such tax exemptions were not part of the constitutional amendment that legalized casino gambling. Penn National and Rock Gaming obtained this exemption in separate memorandums of understanding with the governor’s office in 2011. Racinos obtained the tax exemption through 2012 legislation that overhauled the state’s gambling laws.

Among other issues addressed by the committee:

  • A closer look at games like the Queen of Hearts which “slipped through the cracks” despite four different agencies enforcing gambling laws. The committee recommended oversight of this game temporarily by a single state agency, like the Ohio Casino Control Commission, and more studies on the possibility of a more unified system of oversight.
  • Further explore daily fantasy sports websites like DraftKings and FanDuel, either by this committee or through the introduction of legislation. Illinois became the eighth state to ban daily fantasy sports games. The State Attorney General ruled they are illegal gambling regardless of whether or not they are games of skill or games of chance. Legislation has been introduced that would legalize such games in Illinois.