CINCINNATI — Ohio launched a new form of play on April 1. Mark Rizzo won two jackpots on April 3.
“Saturday I made $500 and Sunday I made $400,” said Rizzo, a State Farm Insurance agent and proud member of VFW Post 6069 in Lebanon. “It’s money for charities, so it’s better than going to the casino where they don’t give anything.”
The Lebanese Post is one of approximately 900 veteran and fraternal organizations now eligible to obtain a license for e-Bingo, an electronic gaming platform authorized by an amendment to the state budget bill last June. . The amendment ended a nine-year legal battle over the legality of electronic gaming devices. It could also triple the number of devices in play at Moose Lodges, Amvets Posts, and VFW rooms like the Lebanon Canteen that Rizzo frequents.
“It’s a pretty substantial expansion,” said Derek Longmeier, executive director of the Problem Gambling Network of Ohio. “The more opportunities there are to play in Ohio, the more Ohioans will play and the more Ohioans will be affected.”
Gambling addiction won’t be a problem for the five new machines operating at 15 W Silver Street in Lebanon, said Mike Milam, a Navy veteran who keeps the books for the 200-member post.
Milam prefers to highlight the $33,000 his post donated to charity in 2021.
“Without charity games, fraternal orders would essentially go bankrupt,” Milam said. “Our big thing here is that when you play, we all win. From tickets (paper bingo draws) to machines, every dollar you play supports the publication. And we basically get 25 cents on every dollar.
The big picture
The WCPO 9 I-Team covers the expansion of gambling in Ohio as it makes state-sanctioned wagering available in thousands of new locations and millions of smartphones over the next 12 months. Beyond the 9,000 new gaming machines now possible through e-Bingo, the Ohio Lottery aims to make 2,500 sports betting kiosks available in bars and restaurants by January 1, 2023. And the Ohio’s Casino Control Board is drafting the rules that will allow 25 online operators to partner or compete with 40 retail or physical sportsbooks.
Charitable gaming accounted for just a 2% slice of the $27.6 billion pie that made up Ohio’s legal gambling market in 2021. Slot machines and video lottery terminals engulfed 78% of all dollars wagered last year, with $12.8 billion wagered in the state’s seven racinos and $8.6. billion shared between the four Ohio casinos. When the Ohio sports betting market fully develops, experts predict it will claim between $3 billion and $12 billion in annual wagering.
Will these bets drive the market to over $30 billion? Or will players cut slots and lottery games hedge their sports bets? And what impact will these changes have on gambling addiction in Ohio? A 2017 study by the Ohio Department of Mental Health estimated that the number of at-risk and problem gamblers doubled after casinos and racinos opened between 2012 and 2014. Will it happen again? with this expansion?
Such questions were dismissed as irrelevant at VFW’s Lebanese post, where the members played drawstrings and demonstrated the new machinery for WCPO’s camera.
“If we’ve seen someone get carried away and spend their rent money on the machines, it’s not too hard to recognize those things,” Milam said. “With this group, someone will say something about it.”
How we got here
Charity bingo has been legal in Ohio since 1976, but most veterans and fraternal organizations used paper tab games before 2011, when the Ohio Veterans and Fraternal Charitable Coalition signed a contract with a Columbus to install electronic raffle games at veterans’ stations across the state. This put veterans in direct competition with casinos and racinos, which opened gradually between 2012 and 2014.
In 2013, Ohio Attorney General Mike DeWine ordered electronic raffle games to be shut down, saying they were slot machines, legal only in casinos. Veterans’ groups quickly won an injunction to prevent the closure, sparking a court battle that lasted until January. The Ohio Supreme Court ultimately dismissed the case as the Ohio Attorney General’s Office rolled out a new regulatory framework for e-Bingo.
“On the old machines we had the wheels and so on, more similar to what’s in casinos,” Milam said. The new machines “are electronic drawstrings, as they call it. They are supposed to be the electronic version of the pop tickets that you would of course buy at bingo.
The new games debuted to mixed reviews at Milam’s VFW post. Some members have complained that they are harder to win. Others said the machines had frozen. Milam said his vendor told him a software patch was in the works, slowed by a regulatory review required by the attorney general’s office.
Milam is relieved that the legal issue has been resolved. But he’s annoyed that the games come with new restrictions, including a rule that makes him ineligible to play.
“Casinos and the government cracked down on us to make it harder to donate to charity,” he said. “People are still playing them at our position, but it’s hard to say if it’s going to work. I will know more in six months.
Expansion of the game?
Also an open question: How big will e-Bingo be in Ohio?
“We haven’t made those calculations,” said Marc Downing, general counsel for Grover Gaming, one of three companies licensed to manufacture and distribute e-Bingo games in Ohio. “By the end of the day, we will have over 200 locations installed and active and we expect to have 1,200 electronic bingo devices installed and active.”
Downing said Ohio had three companies competing in that market before last year. The Ohio Attorney General’s office has licensed six companies as manufacturers or distributors, with three applications pending. The competition is already fierce. Milam said Grover Gaming changed its pricing a few weeks after the Ohio launch to match rival Arrow International. It shares 65% of total revenue with its customers, instead of the 50-50 revenue split that prevailed in the industry last year.
“I think we will be successful in capturing a large share of the Ohio market, based on the best product and the best price for these clubs,” said Ken Lynchard, director of sales for Arrow.
Like Grover Gaming, Arrow International is licensed as a manufacturer and distributor who declined to provide revenue projections. But the two see an opportunity to make more money in Ohio with the new system. Indeed, each of the organizations eligible for licenses is authorized to install up to 10 machines. So Ohio could eventually have 9,000 machines in operation.
“There used to be over 3,000 raffle-style games,” Lynchard said. “So this is a great opportunity for us.”
The man responsible for regulating the new machines does not know how many bets will take place on them.
“Machines that existed before instant electronic bingo were by and large illegal and unregulated,” said Daniel Fausey, head of the charity law section of the Ohio attorney general’s office. “So we don’t have good data on how these machines were used.”
The GA has better data on paper bingo games, which generated $689.7 million in bingo revenue in 2021 and $93.7 million in net profits for veteran groups, after paying prizes and spending. Fausey is unsure of the impact of new games on pull-back gaming revenue, but added that the goal is for new machines to “eclipse the availability and revenue stream they’ve seen” from machines. electronic raffles.
“What we’re really doing here is modernizing existing bingo and doing it seamlessly,” Fausey added. “They are required to give us real-time access to their records and finances. We’ll be able to make sure the money goes where it’s supposed to go…and be safe for users.
food for thought
Longmeier wonders if lawmakers thought about the ramifications when they passed the new e-Bingo rules in a last-minute amendment to the state budget bill. There was no debate or public hearings on the amendment.
“Getting feedback from stakeholders is critical,” Longmeier said. “It is essential to understand what the impact will be. Putting consumer protections in place is key to helping those who are going to be negatively impacted. »
Longmeier thinks key protections have been left out.
“The initiation age for e-Bingo is 18, compared to 21 for casinos or racinos,” Longmeier said. “There are no dedicated funds to support those affected. And they’re going to be in veteran fraternal clubs. Veterans are more likely to develop gambling problems than the general population. »
For Milam, charity gambling solves more problems than it will ever cause, bringing joy in the process.
“Every year at Christmas we all put on our VFW hats,” he said. “We meet at Walmart at 7:30 in the morning on a Saturday and kind of have an amphibious landing, we all invade. We grab carts and walk in and buy $5,000 worth of toys. All of a sudden. And we are taking it to the local Toys for Tots Lebanon.