Ohio Would Ban the Online Bonus, Allow the Casino-Floor One, and Let the Operator Deduct It

Editor's note: TrueEdge builds odds tools and earns affiliate commissions from licensed sportsbooks. This piece argues a position on gambling regulation and our commercial interest runs toward the licensed online operators the bill would constrain. Weigh it accordingly.

State Representative Brian Stewart sat on an iDevelopment and Economic Association panel on Friday and told the online gaming industry's own trade group what his price is.

"We would say that you can't offer online promotional credits," Stewart said. "You can offer promotional credits, but they need to be credits for the land-based casino."

This was reported as news. It is not. Page one of the Ohio Legislative Service Commission's analysis of House Bill 298, dated May 20, 2025 and prepared by LSC attorney Emily E. Wendel, says the bill "prohibits an internet gambling operator from issuing promotional gaming credits to patrons for the purpose of participating in internet gambling," and "allows an operator to issue promotional credits to internet gambling patrons for in-person gaming at a casino or racetrack or for accommodations, food, beverages, entertainment, or other items at a casino or racetrack."

The provision is sixteen months old. What happened on Friday is that its author defended it in a room full of the companies it targets.

The thing worth reading is on page two of the same document, and as far as we can find nobody has written about it.

The exemption

Under the heading "Taxation of internet gambling," the LSC analysis lists what the bill does to the Revised Code's tax chapters. Among the changes: the bill "exempts the value of any promotional credits related to in-person gaming from a casino operator or racetrack's gross receipts for tax purposes."

Set the two clauses beside each other. An online promotional credit is prohibited outright. A promotional credit redeemable on the casino floor is permitted — and the value of it comes out of the operator's taxable gross receipts.

That is not a restriction on promotional spending. It is a redirection of promotional spending with a tax deduction attached to the approved destination. An Ohio casino operator who moves a dollar of acquisition budget from an online bonus to a floor credit does not spend less; it spends the same dollar somewhere the state has agreed not to tax.

Promotional deductibility is one of the most-fought questions in American gaming policy. Colorado phased its deduction down. Virginia limited it to the first year. Michigan capped it. Every one of those fights was about whether states were taxing revenue that operators had already given away. Ohio's bill resolves the question by geography: the deductible promo is the one that requires a car.

What the rest of the bill does

Worth having on the record, because the promo clause does not sit alone.

H.B. 298 was introduced by Stewart, of House District 12, with Marilyn John of District 76, and it creates a new Revised Code Chapter 3771 with conforming changes to 2915.01, 3772.01, 3772.031, 3772.04 and 3772.062. It levies a 28% tax on internet gambling receipts, 99% of which goes to the general revenue fund and 1% to the Problem Gambling Fund. Licensure is confined to Ohio casino operators and horse racetrack owners — one platform each, and where two eligible companies share a parent, only one of them may hold a licence. The initial licence costs $50 million for five years and $10 million to renew. Suppliers pay $50,000 to apply and $100,000 for a licence. The server has to sit in Ohio. Patrons must be 21 and physically in the state. Credit cards may not fund wagers. Online sweepstakes games — defined by their dual-currency mechanic and their simulation of a gambling game — become a criminal gambling offence.

The bill also required the Casino Control Commission to designate a launch date "no later than March 31, 2026," a deadline that passed six months ago with the bill still in committee, alongside Senator Nathan Manning's competing S.B. 197 and its 36-to-40% rate.

Stewart's pitch on Friday put Ohio iGaming at roughly $400 million a year. For comparison, Ohio sports betting has generated about $600 million in cumulative state revenue since it launched on January 1, 2023.

Why a promo ban is a bigger deal in 2026 than it was in 2025

Because the promo is now the entire competitive surface, and because there is a channel Ohio cannot reach.

Eilers & Krejcik published the current welcome-offer board on September 17: bet365 at $365, FanDuel at $350, Fanatics at $350, DraftKings at $200 as a headline number with room to move. Those are sports betting offers rather than casino ones, and the casino market runs its own arms race, but the shape is the same and the bidders are the same companies. Head-to-head, an online gambling product in a mature state is a price, an app and a bonus, and the first two have converged.

Now the number in the same note that the Ohio legislature cannot legislate: Kalshi's maximum welcome bonus is $25.

Prediction markets do not need promotional credits because they are not fighting for share against a dozen identical apps; they are a federally licensed derivatives venue that does not answer to the Ohio Casino Control Commission and would not be licensed under Chapter 3771 in the first place. Ohio can ban the licensed channel's bonus. It cannot ban the unlicensed-by-Ohio channel's anything, which is precisely the fight forty-odd state attorneys general have spent this year losing and winning in alternating circuits.

The effect of the provision, then, is not to restrain promotional inducement in Ohio. It is to disarm the operators Ohio can regulate against the operators it cannot, and to route the surviving inducement through a physical building that the exchanges do not have and do not want.

The best argument against this piece

Promotional credits deserve less sympathy than we have given them.

The honest case for Stewart's clause runs like this. Online bonuses are a value transfer from the operator to the most sophisticated slice of the customer base — bonus-hunters, arbitrageurs, people running the playthrough maths — and the cost of that transfer is recovered from everyone else through worse pricing. They are also the single most effective acquisition tool ever built for getting a person who has never gambled to make a first deposit, which is the exact mechanism problem-gambling researchers point at. And Ohio's eleven casinos and racinos employ thousands of people in buildings that pay property tax. A legislature deciding that a new online industry should feed the existing physical one rather than hollow it out is doing industrial policy, which legislatures are allowed to do and frequently should.

Most of that we accept. The responsible-gambling version is the strongest form of the argument and it deserves a straight answer.

The answer is that H.B. 298 already contains its responsible-gambling provisions, and they are good ones, and they are not this clause. The credit-card funding ban is a real consumer protection. The 21-and-over floor is a real consumer protection. The 1% carve-out to the Problem Gambling Fund is small but it is honest money. A drafter who wanted to reduce promotional inducement would cap promotional spend, or tax it, or require playthrough disclosure. This drafter permitted the promo, moved it indoors and made it tax-free. Inducement is not reduced by relocation. A free $200 on the floor of a Hard Rock in Cincinnati induces exactly as much as a free $200 in an app, with the added feature that the induced person is now inside a casino.

And the industrial-policy argument proves less than it claims, because the bill does the incumbent-protection work elsewhere and does it far more effectively. Licensure is already restricted to the eleven existing properties. The parent-company rule already stops a group from stacking skins. The $50 million entry fee already makes this a market for balance sheets. By the time you reach the promotional clause, national operators can only enter Ohio by partnering with an Ohio licensee anyway — which means the promo ban is not protecting Caesars, Hard Rock and PENN from FanDuel. It is protecting their casino floors from their own apps.

That may still be what Ohio wants. It is a defensible thing to want. It should be argued as what it is, which is a subsidy to retail footfall paid for by the state's own tax base, and not as a measure to stop national operators from buying customers — because the bill's licensing table already did that on page two.

Where it actually stands

Nowhere, for now. H.B. 298 and S.B. 197 are both stuck in committee, the statutory launch date has already lapsed, and Ohio's iGaming question is entangled with a Republican caucus that would like to eliminate the state income tax and is shopping for revenue to do it with. We do not know whether Stewart intends to reintroduce the bill with changes, and Friday's panel was a defence of the existing text rather than a preview of a new one.

What is worth watching is whether the promotional clause survives contact with the operators. A 28% rate and a $50 million licence fee are numbers a large company will pay. A ban on the acquisition tool that makes the licence worth holding is a different kind of ask, and the companies in the room on Friday know the difference. Stewart went and told them anyway, which is more than most sponsors do.