Ohio’s newest way to gamble: Instant Electronic Bingo

CINCINNATI Ohio launched a new form of gambling on April 1st. Mark Rizzo has won two big prizes by April 3.

“Saturday I won $500, and on Sunday I won $400,” said Rizzo, State Farm insurance agent and proud member of VFW Post 6069 in Lebanon. “It’s money for charity, so it’s better than going to the casino where they give nothing.”

Lebanon Post is one of about 900 veteran and sister organizations that are now eligible to obtain a license for e-Bingo, an electronic gaming platform licensed under 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 machines used in Moose Lodges, Amvets and VFW’s such as the Lebanese cafeteria that Rizzo frequents.

“It’s a pretty big expansion,” said Derek Longmire, executive director of the Ohio Problem Gambling Network. “The greater the chance of gambling in Ohio, the more Ohioans that will be erected, and the more Ohioans that will be affected.”

Mike Milam, a Navy veteran who keeps the books for the 200-member position, said gambling addiction wouldn’t be an issue for the five new machines running on 15W Silver Street in Lebanon.

Milam prefers to emphasize the $33,000 he donated for his position to charity in 2021.

“Without the Charity Games, fraternal requests would basically stop working,” Milam said. “The important thing here, when you play we all win. Whether it’s tickets (the bingo paper raffle) or the machines, every dollar you play supports the post. And we basically get 25 cents out of every dollar.”

Lot tan

Navy veteran Mike Milam has served as a Claremont County veteran service officer since 2019.

The Big Picture

The WCPO 9 I-Team is covering the expansion of gambling in Ohio as it will make state-sanctioned betting available at thousands of new locations and millions of smartphones in the next 12 months. In addition to the 9,000 new gaming machines now possible through e-Bingo, Ohio Lottery aims to have 2,500 sports betting booths available in bars and restaurants by January 1, 2023. The Ohio Casino Control Committee is writing rules that will allow 25 internet operators to partner with or compete with 40 retail sports books or traditional sports books.

Charity gaming was just a 2% slice of the $27.6 billion pie that was Ohio’s legal gambling market in 2021. Slot machines and video lottery stations swallowed 78% of total dollar bets last year, with $12.8 billion bet in seven races in state and $8.6. One billion subscribers among four casinos in Ohio. When the Ohio sports betting market is fully developed, experts predict that it will demand anywhere between $3 billion and $12 billion in annual bets.

Will these bets boost the market to over $30 billion? Or will gamblers cut back on gambling and lotteries cover their sports bets? What impact do 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 raccoons opened between 2012 and 2014. Will that happen again with this expansion?

Questions like this were dismissed as irrelevant at VFW Lebanon, where members played drag tabs and showcased WCPO’s new camera machines.

“If we see someone drifting away and spending their rent money on machines, it’s not very hard to recognize these things,” Milam said. “With this group, someone will say something about it.”

How did we get here

Charitable bingo has been legal in Ohio since 1976, but most veteran and fraternal organizations used card games before 2011, when the Ohio Veterans Alliance and the Fraternal Charity Coalition signed a contract with Columbus to install electronic lottery games at statewide veterans sites. This put the veterans in direct competition with casinos and casinos, which opened gradually between 2012 and 2014.

In 2013, Ohio Attorney General Mike DeWine ordered the closure of electronic lotteries, saying that they were slot machines, and were only allowed in casinos. Veteran groups quickly won an injunction to prevent the shutdown, sparking a court battle that lasted until January. The Ohio Supreme Court finally dismissed the case as the Ohio Attorney General’s Office introduced a new regulatory framework for e-Bingo.

“In the old machines, we had wheels and so on, more like you have in casinos,” Milam said. The new machines “are electronic raffles, they call it. The electronic version of the pop tickets are supposed to be where you’ll buy them, of course, at the bingo game.”

The new games debuted to mixed reviews at Milam’s VFW. Some members complained about the difficulty of winning. Others said the machines froze. Milam said his vendor told him that a software fix was in the works, which had been slowed by the regulatory review requested by the attorney general’s office.

Milam is relieved that the legal issue has been resolved. But he is upset that the games came with new restrictions, including one rule that makes him ineligible to play.

“Casinos and the government have taken drastic measures against us to make charitable giving more difficult,” he said. “People are still playing with it at our site, but it is hard to say if it will work. I will know more in six months.”

VFW_Lebanon.jpg

Lot tan

VFW Post in Lebanon has around 200 members.

Gambling expansion?

Also an open question: How big is an e-Bingo in Ohio?

“We have not made these calculations,” said Mark Downing, general counsel for Grover Gaming, one of the three companies licensed to manufacture and distribute e-Bingo games in Ohio. “By the end of the day, we will have over 200 installed and active sites and expect to have 1,200 electronic bingo machines installed and active.”

Downing said Ohio had three companies competing in this market before last year. The Ohio Attorney General’s Office has licensed six companies as manufacturers or distributors, with three pending applications. The competition is really fierce. Milam said Grover Gaming changed its pricing a few weeks after the Ohio launch to match its rival Arrow International. It shares 65% of total revenue with its customers, rather than the 50-50 revenue split that prevailed in the industry last year.

“My expectation is that we will be able to capture a significant market share in Ohio, based on the best products and best prices for these clubs,” said Ken Lynchard, Arrow’s director of sales.

Like Grover Gaming, Arrow International is licensed as a manufacturer and distributor that has refused to provide revenue forecasts. But they both see an opportunity to make more money in Ohio through the new system. That’s because each license-eligible organization is allowed to install up to 10 devices. So, Ohio could have 9,000 working machines.

“There used to be over 3,000 lottery-style games,” Lynchard said. “So, it’s a great opportunity for us.”

The man responsible for organizing the new machines doesn’t know how much to bet on them.

“The machines that existed before electronic bingo were largely illegal and unregulated,” said Daniel Fauci, head of the charity law division at the Ohio Attorney General’s office. “So, we don’t have good data on how these machines are used.”

AG has better data on paper bingo games, which generated $689.7 million in bingo receipts in 2021 and $93.7 million in net profits for veteran groups, after prize payments and expenses. Fausey wasn’t sure how the new games would affect revenue from raffle games, but added that the goal was for “new devices to outpace the availability and revenue streams they saw from ‘electronic raffles’.”

“What we’re really doing here is updating the existing bingo game and doing that in a transparent way,” Fauci added. “They are required to give us real-time access to their records and their money. We will be able to make sure that the money goes where it’s supposed to go… and is 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 neither debate nor public hearings about the amendment.

“Getting stakeholder feedback is critical,” Longmire said. “Understanding what impact will be critical. Implementing consumer protection measures is vital to help those who will be negatively affected.”

Longmeier believes that major means of protection have been left out of the mix.

“The age to start using e-Bingo is 18, compared to 21 in casinos or casinos,” Longmire said. There are no funds allocated to support those affected. They will be in the fraternity of veterans. Veterans are more likely to develop gambling problems than the general population.”

For Milam, charity games solve more problems than they could ever cause, which brings some joy in the process.

“Every year at Christmas we wear our VFW hats,” he said. “We meet at Walmart at 7:30 a.m. on Saturday and do a kind of amphibious landing, we all conquered. We take wagons and go and buy $5,000 toys. All in one shot. And we take it to our local Lebanon toy store for Tots.”

Leave a Reply

%d bloggers like this: