Gambling is big, big business, and getting bigger. In 2023 alone, more than $35 billion was wagered in Ohio on various available legal games of chance. That’s more than Ohioans spent on groceries.
Of course, grocery shoppers don’t spend their cash in the hopes of winning a jackpot or at least breaking even. Bettors won enough to keep them coming back and driving the growth of gaming across the tri-state region, the state, and the country. That still left about $7.6 billion in revenue for the casinos, racinos, sports books, and lottery in Ohio.
In the Cincinnati region, some of the biggest players in gaming nationally have invested hundreds of millions in recent years to upgrade facilities, add amenities, and attract more customers in what’s become one of the most competitive U.S. gaming markets. The advent of sports betting in Ohio in 2023 and Kentucky in 2024 grew the market significantly, and more growth is anticipated.
The next big thing has the potential to expand the market even further. Online gaming, or iGaming, is already legal in seven states—including three that border Ohio—and is under consideration by the Ohio General Assembly. “The industry has seen a drastic change in the past few years,” states a 2024 legislative commission report on the future of gaming in Ohio. “Revenues continue to increase, [and] the regulatory backbone remains strong.”
All of this new wagering has grown state tax coffers, but it’s also increased concerns about a rise in gambling addiction.
The latest revenue bonanza is sports betting, which launched in Ohio with a bang, as $7.6 billion was wagered in the state in 2023. In year one, Ohio became the sixth-largest market in the country, according to PlayOhio, which covers gaming in the state. “Sports betting has changed the landscape completely,” says Jay Masurekar, managing director and head of gaming and travel investment banking at KeyBanc Capital Markets in Cleveland.
The mobile gaming companies FanDuel and Draft Kings currently dominate the market. FanDuel is owned by Flutter Entertainment, an $11.8 billion Irish sport betting and gaming operator that’s traded on both the New York and London stock exchanges. Draft Kings is a $4.8 billion company that went public in 2020 on the Nasdaq exchange.
The region’s four casinos get much of the public’s attention, but the onset of sports betting has resulted in a new heavyweight contender in the local gambling arena: Belterra Park in Anderson Township. As soon as sports betting became legal in Ohio, the racino formerly known as River Downs announced a partnership with FanDuel to offer an online app and a 2,300-square-foot retail sportsbook with three betting windows, 21 televisions, seating for 68, and nine self-service betting kiosks.
The Belterra/FanDuel tie-up was the highest grossing sports gaming enterprise in Ohio in 2023, according to Ohio Casino Control Commission records, and was on track to lead the pack again in 2024. “That one property has almost 40 percent of the total Ohio sports betting handle and 33 percent of the win,” says Masurekar. For the uninitiated, “handle” is the total amount wagered, while “win” is the amount the house keeps and is often called “revenue” or “gross gaming revenue.”
Sports enthusiasts wagered more than $2.7 billion with Belterra Park in 2023, most of it through its FanDuel app. After paying out winnings and accounting for its considerable promotions,
Belterra Park reported $391 million in taxable revenue from sports gambling in Ohio’s inaugural year. The FanDuel partnership was the eighth with Belterra parent Boyd Gaming, which owns a small stake in the Irish company. The partnership also includes Belterra Casino Resort in the southern Indiana town of Florence, 50 miles from Cincinnati.
Illustration by Nate Kitch
Sports betting is the latest expansion in a gambling marketplace that’s evolved and grown quickly over the last decade. Gambling in Ohio took off in 2009, when casinos received the green light to open in the state, launching an ultra-competitive multibillion-dollar industry. That year, Ohio voters approved Issue 3, legalizing gambling at casino sites in Cincinnati, Cleveland, Columbus, and Toledo, the first of which would open in Cleveland in May 2012.
Cincinnati’s casino opened in 2013 under the Horseshoe brand. But Cincinnatians had been within an easy drive of a casino since 1996, when Rising Star Casino Resort debuted in southern Indiana, a little more than a half hour from downtown Cincinnati. That was followed by Argosy Casino, now called Hollywood, in Lawrenceburg. At first confined to boats that were required to cruise the Ohio River while gamblers played, the Indiana casinos are now full-service land-based resorts with restaurants, hotels, and event spaces.
In 2019, the competitive environment heated up when Hard Rock, one of the most recognizable brands in gaming and entertainment, entered the region to run the downtown Cincinnati casino. The company infused the Hard Rock vibe there—including rock & roll memorabilia, live concerts, and dining—and made more than $40 million in renovations, unveiling the changes in an October 2021 grand re-opening.
Not to be outdone, one of the biggest names in gaming, Churchill Downs Inc., entered the market in a big way in 2019 with the purchase of Turfway Park in Northern Kentucky. The Louisville-based company overhauled and expanded Turfway, installing 800 of Kentucky’s version of slot machines, called historical horse racing machines. It also tore down the old grandstand and built a new indoor venue with dining and an event center. The new facility, now called Turfway Racing and Gaming, opened in 2022 following the $226 million renovation.
“This is one of the more competitive landscapes in the U.S. from a gambling perspective,” says Turfway General Manager Matthew Shehadi, who started at Turfway six months ago after 20 years in the Las Vegas market. Turfway has designs on increasing its share of the market. “We’re third in the Northern Kentucky/Ohio/Indiana market from a market share perspective. We’ll continue to grow our reach in in this very competitive arena.”
Horse racing still takes place at Turfway, where a year-round synthetic track was installed as part of its massive renovation. The Kentucky legislature approved its version of slots partly to boost revenue for the state’s signature racing industry, increase prize money, and attract better-ranked jockeys and horses. In December, the racino held what it called the Turfway Park Synthetic Championships, four stakes races with a purse of $250,000 for each.
That kind of prize money is possible partly from the revenue earned with the slot machines. “A percentage of our revenue goes right into a purse account, and we use that to drive a better quality race here,” Shehadi says. Turfway recorded a 5 percent increase in overall attendance in 2024 over 2023, he says.
The Cincinnati market, encompassing three states and 2.2 million people, has attracted some of the biggest and wealthiest gaming companies in the world. The Hard Rock Cincinnati casino is owned by VICI Properties Inc., a $3.6 billion real estate investment trust that owns a large portfolio of gaming, hospitality, and entertainment venues, including Caesars Palace Las Vegas, MGM Grand, and the Venetian Resort Las Vegas, three of the most well-known entertainment facilities on the Vegas Strip. VICI Properties owns 54 gaming properties in the U.S. and Canada and leases the Cincinnati casino to Hard Rock, whose business and brand is owned by the Seminole Tribe of Florida.
Hard Rock International is a privately held company based in Davie, Florida, with an estimated annual revenue of $5.9 billion in 2023. The Seminole Tribe acquired the Hard Rock brand and franchise rights in 2006 for $965 million, prevailing over 72 other bidders. That enterprise has since grown to include 23 Hard Rock hotels, 11 casinos, and more than 150 Hard Rock cafes, with more in the pipeline. The Seminole Tribe has an overall estimated net worth of $12 billion.
Churchill Downs is a $2.5 billion publicly traded company headquartered in Louisville that owns Turfway Park Racing and Gaming, Newport Racing and Gaming, and a 50 percent stake in a joint venture that owns Miami Valley Gaming and Racing in Lebanon. An organization that launched the world’s most famous horse race, the Kentucky Derby, in 1875 has grown into a major gaming and hospitality corporation owning 12 regional casinos, 14 gaming entertainment venues with more than 9,000 historical horse racing machines, and an online wagering platform for horse racing.
Penn National is a $6.4 billion company based in Wyomissing, Pennsylvania, that owns 43 casinos and racetracks throughout North America, including Hollywood Casino in Lawrenceburg and Hollywood Casino Columbus as well as online sports betting in 18 jurisdictions, including under the ESPN Bet brand. Gaming and Leisure Properties is a $1.4 billion company that owns 61 gaming properties in 18 states, including Belterra Park. It leases the horse racing and slot machine venue to Boyd Gaming. The company was created in 2013 as a real estate spinoff from Penn National.
Boyd Gaming is a $3.7 billion company based in Las Vegas that operates 28 gaming properties in 10 states, including Belterra Park, and is a minority owner of FanDuel Group.
Full House Resorts is a $241 million company based in Las Vegas that owns seven casinos, including Rising Star Casino resort, and more than 3,000 slot machines. In a sign of the cutthroat gaming landscape, the region’s first casino now wants to relocate from Rising Sun to a town outside Fort Wayne, Indiana. It’s been the least profitable of the region’s four casinos and among the 13 in Indiana. The move would make it the only casino in a more populous area than its current location. Any move requires approval from Indiana gaming regulators and the local community.
Widespread legal gambling in Ohio can be dated to 1973, when voters approved State Issue 1 to establish a statewide lottery, which rolled out in August 1974. Fifty years later, the state-owned lottery offers more than a dozen games and records an average sales volume of more than $12 million a day, or $500,000 an hour, former Ohio Lottery Commission Executive Director Dennis Berg told the state study commission. “The Ohio Lottery, as compared to years past, is a very different and complex organization which no longer simply sells just an instant scratch-off ticket and a daily draw game,” Berg said. “The Ohio Lottery is literally tied into a very complex web of integrated technology, communication systems, social media services, and multi-state lottery consortiums.”
The more than 11,000 retailers in the state who participate in the Lottery sold $4.5 billion in lottery tickets and scratch-off games in 2023, the Commission reports. But it was the casinos that turned gambling into mainstream entertainment. Once the near-exclusive domain of Las Vegas and Atlantic City, casinos have become part of the American landscape. “Wherever you are in the U.S., you can find a casino within a 90-minute drive,” says KeyBanc’s Masurekar. “Gaming is not a novelty any longer.”
That saturation has driven the rush to sports betting and to gaming companies offering other amenities such as dining and entertainment. “Gaming is one of the most attractive value propositions for a consumer today,” Masurekar says. “Rather than spending $200 on a concert, I can go to a casino and spend the same amount of time and money with my friends and have a great time and maybe win something back.”
While company profit margins are significant on slot machines, sports betting’s margins are smaller for several reasons, he says. The tax on sports betting revenue, currently 20 percent, is higher than in most states. There are also technology costs in designing and deploying online applications, and customer acquisition costs are significantly higher, with most purveyors offering big bonuses for first-timers. “You have to continuously do marketing and make sure you’re retailing the customer and not letting them go to a competing platform,” says Masurekar.
On top of that, the betting platforms—FanDuel, DraftKings, and others—take a cut of betting revenue from the casino or other licensees. All that makes for a highly competitive marketplace vying for sports gambling dollars.
Some companies have found it too competitive. In mid-2024, both the Cincinnati Bengals and FC Cincinnati lost their sports betting providers, as the Bengals’ partner, Betfred, and the soccer club’s partner, SuperBook, withdrew from the Ohio market. “The sports gaming world has proven to be a dynamic space, and evolving market conditions have impacted Betfred’s operations in Ohio,” Bengals officials said in a statement after the announcement.
Enter internet gaming, or iGaming, which offers mobile online casino games. As legal gambling has expanded in Ohio with the lottery, casinos, and sports betting, the next step is likely to be permitting online poker or other internet casino gambling. Masurekar tabs the profit potential as being better than sports betting. “The iGaming profit margins are much higher,” he says.
A bill introduced in the Ohio Senate in September would permit each of Ohio’s four casinos and seven racinos to offer websites and apps enabling gambling via casino-style games such as slots, blackjack, and poker.
The major gambling players, however, are still sorting out what online gaming might mean for them, and the idea has both detractors and proponents. Some casino operators say it would cannibalize sales at their brick-and-mortar slots and table games, while others think it would help recruit new patrons. Some lottery retailers say it would hurt their sales.
The three Republican House members of the study commission say they support iGaming. “While we understand their hesitation to expand due to an uncertain impact, we believe that iLottery and iGaming could be a net benefit to the state of Ohio,” wrote House Finance Chairman Jay Edwards of Nelsonville and Reps. Jeff LaRe of Fairfield County and Cindy Abrams of Harrison in a joint letter. “Looking at other states who have implemented either or both iLottery and iGaming, we see significant increases to tax revenues generated with greater participation but also that in-person sales continued to increase. That can largely be contributed to more people participating in the market on their phones and becoming more comfortable/knowledgeable about doing it at a physical location.”
Boyd Gaming, which operates Belterra Park, is in favor, says Ryan Soultz, the company’s vice president of governmental affairs. “We see iGaming as a natural step in the evolution of the gaming industry,” he told the commission.
MGM Resorts International, which operates a racino in the Cleveland area, also supports it. “Based on our operational experience in New Jersey and Michigan, where iGaming is offered, we have observed that there are complementary synergies between our retail casino properties and iGaming,” Rick Limardo, its senior vice president of government affairs, told legislators.
But Miami Valley Gaming & Racing President and General Manager Craig Robinson says iGaming should be confined to existing operators. “Further expanding Ohio gaming to include internet-based gaming outside of the existing racinos would lead to a dramatic shift away from existing gaming products and locations, which have invested heavily in Ohio,” he told the commission.
Daniel Reinhard, senior vice president of government affairs for Jack Entertainment, which operates the Cleveland casino, says online gaming would hurt the brick-and-mortar casinos. “Ohioans can observe their local malls to understand the impact that iGaming will have on local economies,” he said. “Just like online retail has decimated local retail, iGaming will do the same.”
Whatever happens with iGaming, mental health professionals have already noted a significant impact from the expansion of gambling on the potential for addiction. In the first year of legal sports gaming, the Ohio Department of Mental Health and Addiction Services saw a 55 percent increase in call volume to its Problem Gambling Helpline, testified Stacey Frohnapfel-Hasson, chief of the Office of Prevention and Problem Gambling for the Ohio Department of Mental Health and Addiction Services.
The department has conducted a survey every five years since 2012 of the prevalence of gambling in Ohio. The latest survey, which included nearly 15,000 people in 2022, found that only 17 percent of Ohio adults do not gamble at all. Of those who do, 20 percent (which extrapolates to more than 1.8 million people) are at risk of developing a gambling disorder. Three of every 100 Ohio adults are diagnosable with a gambling disorder, the survey found. “That 3 percent is about 255,000 people, or the population of Toledo,” said Frohnapfel-Hasson.
The state’s problem gambling and addiction fund receives 2 percent of the state taxes collected by the casinos. The state also operates a program called TimeOut Ohio, which allows people to exclude themselves from the seven racinos and four casinos for one year, for five years, or for a lifetime. Through January 2024, more than 8,000 people have participated in the program.
Much of the state tax revenues from casino and sports betting are directed toward schools, although it’s far from a windfall for education funding. About 34 percent of the casino taxes are distributed twice a year to school districts on a per-pupil basis. Jennifer Hogue of the Ohio Schools Boards Association says districts tend to view that money as one-time funding, as it falls outside the state funding formula and they can’t count on receiving a steady amount year to year.
Ohio schools received a total of $114.2 million from the casino revenue tax in the 2023-2024 school year, according to the Ohio Department of Taxation. In Hamilton County, that ranged from $2.2 million for Cincinnati Public Schools (which has an annual budget of more than $600 million) to $32,000 for Lockland schools.
About 51 percent of casino taxes collected is distributed quarterly to all 88 counties based on population. In Hamilton County, the city of Cincinnati splits that money with the county under a provision of the law that allows the most populated city located in the county, if its population is over 80,000, to receive half of the county money.
Profits from the Ohio Lottery and from the state tax on sports betting revenue are directed to the Ohio Lottery Profits Fund, which state legislators use to help fund education. Lottery profits and the sports betting tax don’t provide any additional money for schools beyond what the state legislature has already approved. “When the General Assembly does the budget, they take the money in the Lottery Profits Fund and they use that to fund the school funding formula,” says Hogue. “The amount that’s needed is arrived at, they use the lottery profits to fund that, and then whatever is still needed they’ll fund with general revenue funds. So it doesn’t really provide any extra funding for schools.”
The bottom line, as Hogue explains, is that lottery profits and sports betting taxes actually support the state’s general revenue fund, which can be used in any way the legislature desires.
When it comes to gambling, one thing is a sure bet: With the public’s voracious appetite for gambling, the major players here will add games and invest in their facilities while new ones will seek a piece of the action, as Hard Rock and Churchill Downs did a few years ago.
Turfway Park, for example, wants to deploy its new event center to bring in corporate events and expose a fresh audience to its new games and racing cards. As Shehadi says, which could apply to the rest of the field, “We’re just focused on continuing to drive market share.”
The stakes have never been higher.