Proposal Would Buy Time for Sportsbook Project

YOUNGSTOWN, Ohio – With some sports betting license holders hitting roadblocks in their efforts to get started, the state is considering a measure that would give these licensees some breathing room.

Under the current rule, entities that do not accept a single wager by July 1 will lose their licenses. But a proposed rule change being considered by the Ohio Casino Control Commission would give the agency’s executive director discretion on whether to revoke a license.

Phantom Fireworks of Youngstown is one of a handful of Type B – bricks-and-mortar sportsbook – licensees affected by the proposal.

The company is in the process of securing a location for a betting parlor and has proposed an addition to be built at Covelli Centre to house it. But there is no chance that it will be open before the deadline.

In a message sent to sports gaming stakeholders at the end of April, the casino commission revealed it is considering an amendment to its mandatory “use it or lose it” requirement that would give the executive director flexibility and discretion. The director could extend the deadline for a licensee if its efforts are on track but moving slowly.

The commission accepted comments regarding the proposed amendments through May 7. It could make changes to the proposal or continue the rule-change process, which typically takes up to six months to finalize, according to Jessica Franks, spokeswoman for the commission.

The commission awarded sports gaming licenses in 2022. Wagering began Jan. 1, 2023.

There are three categories of licenses: Type A is for computer apps, such as DraftKings, FanDuel and Bet MGM. Type B is for bricks-and-mortar sports betting parlors, such as the one at Hollywood Gaming at Mahoning Valley Race Course in Austintown. Type C licenses are kiosks, which can be found in bars and restaurants.

If a license were to be revoked, it could then be awarded to another applicant, Franks said. There are five Type B licensees that have not yet started to accept wagers, she said.

The state’s original “use it or lose it” deadline was Dec. 31, but the commission extended it six months.

Covelli Centre Addition

In March, Phantom Fireworks met with city officials and proposed a partnership in which a 20,000-square-foot addition to Covelli Centre would be built that would include a restaurant and a sportsbook. The city agreed to study the proposal, according to Michael Podolsky, deputy general counsel for Phantom, and requested more information about potential revenue.

Podolsky said the entire project would cost approximately $7.5 million. The city’s investment would be $5.5 million to build the addition, while Phantom would spend approximately $1.5 million to $2 million to outfit the first two floors.

“We are working with consultants to put together financial projections … and then present them to the city,” Podolsky said.

Phantom is working closely with the casino commission on the matter. “If we continue down this path, having it open within the current time frame is not possible,” Podolsky said. “We would need an extension of the deadline.”

Podolsky said the original intent of the mandatory “use it or lose it” clause was to prevent entities “from squatting on licenses just to keep [other potential sports gaming operators] out of their area.”

Licenses for the betting parlors went to sports teams, casinos and racetracks in the state. Phantom Fireworks owns the Youngstown Phantoms hockey team, which plays its home games at Covelli Centre.

Pictured at top: An architectural rendering of the proposed addition to Covelli Centre.