Ohio State Lottery is Losing Money on its Sports Betting Operation

Article ByDavid Weir

May 1, 2023

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Posted in: Ohio Gambling News, US Gambling News, US Lottery News, US Sports Betting News

The Ohio State Lottery is losing tens of thousands of dollars a month offering sports betting kiosks in the state, according to its own monthly stats released this week.

The Ohio State Lottery is also currently under scrutiny in general. The Ohio Governor Mike DeWine has ordered an independent investigation into the Lottery Commission, and earlier this month, its long-term Director, Pat McDonald, abruptly left his role.

Staffing Expenses

Sports betting was legalized in Ohio on January 1 of this year. These new figures show that so far, the lottery’s share of the revenue from sports betting kiosks isn’t covering the costs of operating and administrating them.  

The kiosks took $3.2 million in bets since they opened, the total figure up to the end of March.

However, the held revenue from that period is just $349,816. When the Lottery’s share is figured out, it has made a total of $75,473 for the year so far.

That number for the last three months just barely covers one month’s staffing expenses in running the regulatory department. The initial setup for the new office was also some $330,000.

Tenth of a Percent

The revenue from the betting kiosks is unequally shared between the gambling venues they’re located in and the Lottery.

But that’s just part of the picture. The bigger problem is Ohio’s sports bettors are just not that enthusiastic about the kiosks.

The state’s sports betting operators have pulled in more than $1.7 billion in total handle since legalization. However, 97% of that has been from online betting.

Out of the remaining 3%, 2.9% was spent at physical sportsbooks. That leaves just 0.1% of Ohio’s sports betting spend for the lottery-run kiosks.

The sports betting platforms on the kiosks are run by Intralot. The Greece-based platform provider hasn’t covered themselves in glory since taking over a similar position for Washington, D. C’s, lottery in 2020.

They significantly lost out to sports betting competition before improving. However, during Super Bowl LVII in February of this year, the GambetDC platform was completely taken offline for Apple device users after a failed update.

Intralot then had to pay $500,000 to the D.C. Lottery in compensation for the incident. Even before that mishap, GambetDC has been plagued by bad customer reviews and other issues.

Taking a Loss

Despite that controversy with its sports betting partner, the Ohio Lottery Commission plans to continue rolling out more kiosks. They currently have 940 locations and are looking at 1,100 by the end of 2023.

“While we were tasked by the legislature with starting the lottery sports gaming program, we knew that it was not going to be as lucrative as traditional lottery products,” Commission spokesperson Danielle Frizzi-Babb told local media outlet Cleveland.com.

“Sports gaming’s odds are volatile and change quickly, and sometimes proprietors take a loss,” she added.

However, financial troubles are not the only concern this month for the Lottery Commission.

Its long-term Director, Pat McDonald, abruptly resigned earlier in the month, citing ill health.

Ohio Governor Mike DeWine has since launched an independent investigation into human resources irregularities at the Commission, as reported by Cleveland.com.