On November 16, 2022, the Ohio House Financial Institutions Committee voted to send SB 249, which establishes a regulatory sandbox in the state, to the floor of the House for a vote.  As Citizens Against Government Waste has noted, regulatory sandboxes provide opportunities for innovation that are good for both consumers and businesses.  All members of the House of Representatives should support this legislation so that Ohio can join Arizona, Florida, Kentucky, Nevada, North Carolina, South Dakota, Utah, Vermont, West Virginia, and Wyoming in adopting a regulatory sandbox to provide a win for innovation the state.

The first regulatory sandbox was adopted in 2015 in the United Kingdom.  Managed by the Financial Conduct Authority (FCA), the UK’s sandbox opened the door for businesses to “test innovative products, services, business models and delivery models” absent excessive red tape. 

The FCA sandbox has proven to be a boon to innovation.  It has reduced the time between application and acceptance by 40 percent, and 80 percent of “successfully tested” companies remain in operation.  The FCA’s sandbox has inspired the adoption of similar regulatory relief in the United States. 

Beyond providing opportunities for innovation, regulatory sandboxes also increase competition.  States with burdensome and onerous regulations that make it more difficult for new companies to enter the marketplace have less competition and innovation.  Consequently, new companies may choose to invest in states like Kentucky or North Carolina that have regulatory sandboxes and a more business friendly environment.  Rather than becoming a state to avoid, Ohio’s regulatory sandbox would enable the state to become more competitive and attract greater investment and innovation.

The Ohio Senate has recognized the boon to the economy a regulatory sandbox would create for the state and passed SB 249 unanimously on March 2, 2022.  With such strong bipartisan support, the Ohio House should not hesitate to also adopt this strong reform to bring increased innovation to the Buckeye State.