It's illegal here in Ohio, but it clearly happens. Not just in bars, but retail space as well. All those displays at the end of grocery aisles? Almost always paid for here. It's allegedly the reason Leinenkugel grew so fast in this state in such a short time after arriving.
After 20 years of managing large scale chain restaurant locations in Ohio, I have to say I was never offered money for lines. If anything it was almost always the distributor trying to come up with clever ways to entice us to stock "The new Hot Item." The closest I would say it ever came to paying for lines was a local visit back in the early 90's from a rep from a rather large, famous, Irish brewery. They came to town with a logo'd van, complete with their "new" nitro taps that would make their brew flow and pour beautifully. A couple pints here and there, was all they offered, but it was a huge show of pushing for a change to our then current process(no nitro) and draft line up.
At other times, distributors come in with: sports tix, pint glasses, POS materials, logo'd barware: shakers, drying racks, etc, but never straight up cash. I guess I never thought about what it did to the competition, but luckily for most of my career, I was with a huge national chain that told me what I had to carry. I am sure that someone well above my pay grade was getting those payoffs on a national level though. Otherwise, I'm sure that we would not have carried such a crappy selection at times.
The great thing about living in Cincinnati area now is that almost anywhere I go, the draft focus is on "Drink Local Beer" and I love it. So many great breweries here and I would hate to think of them getting squeezed out of any market by some of (or mainly one) the older "Craft Breweries" in Ohio for tap space.
Again: "Drink Local Beer" live it, and love it!