Ohio lawmakers agreed on the state’s new budget, but opted not to include an increase on sports betting tax.
Previously, Gov. Mike DeWine had proposed to double the rate from 20% to 40%, but this failed to receive approval. Lawmakers then introduced a bill to tax betting handle, but this also failed to gain traction. The proposal would have kept the tax on revenue at 20%, but also added a 2% tax on the amount wagered by bettors.
DeWine’s plan to raise the tax aimed to generate an additional $130–180 million per year for youth sports, stadiums, and infrastructure. Sen. Louis Blessing, who proposed the tax on betting handle, commented, “Adding a modest 2% handle tax could nearly double Ohio’s sports betting tax take without raising the existing revenue rate.”
Sportsbooks Opposed The Tax Increases
Ohio sportsbooks vehemently opposed the tax hikes, with Sports Betting Alliance (SBA) VP Scott Ward commenting, “This would amount to a 400% tax increase over a two-year period, upstanding American businesses, who work closely with state regulators, shouldn’t have to fear government arbitrarily raising their taxes by exorbitant amounts. But that’s exactly what Ohio sports betting consumers are facing.”
Ward also commented that a massive tax increase would “give a huge boost to unregulated and offshore apps”.
Ohio would have become the first state to tax both betting handle and revenue if the legislation had passed. Since the bill’s introduction, Illinois has added a tax of $0.25 on every bet placed, with $0.50 for operators that accept over 20 million bets a year.
The SBA spoke out against that move as well, calling it “discriminatory”. The two leading sportsbooks in the US, FanDuel and DraftKings announced that they would pass on the charge directly to users and add a $0.50 betting surcharge on every bet placed in Illinois.
Ohio lawmakers may have seen this response and decided against raising their taxes. The state has already doubled the tax rate, from 10% up to 20% two years ago.
Ohio Consider Online Casinos As Source Of Revenue
Rather than increase the tax on sports betting, lawmakers are considering legislation to legalize online casinos in Ohio. Rep. Brian Stewart‘s bill would set a tax rate of 28% on revenue generated by platforms, while Sen. Nathan Manning has proposed a rate of 36-40% in an alternative bill introduced in the Senate.
Stewart introduced his bill last month, and it is under consideration in the House Finance Committee. He commented that the legislation was a logical step in collecting revenue from an industry that is already present, but unregulated.
Stewart said, “This is a logical next step to capture revenue from players already gambling online—mostly unregulated.”
It is estimated that Ohio residents already play at online casinos in big numbers with unregulated platforms generating $3.7 billion in the state last year.
The bill proposes a ban on sweepstakes casinos in a bid to tackle the growth of the unregulated industry. In addition to the 28% tax rate, it would charge a license fee of $50 million plus an additional $10 million for renewal after 5 years. Stewart said he expected legalization could generate $400 million a year at a minimum, and possibly as much as $800 million in additional tax revenue.
Manning’s bill sets the same license fee of $50 million, plus a $5 million renewal fee, but at a higher tax rate of 36% and 40% for outside operators.
With no sports betting tax increase, the chances of legalizing online casinos may well have increased. The legislation already has bipartisan support, and Republican House Speaker Matt Huffman commented that the public has “sort of turned the corner” in relation to legalizing online gambling.
Adam is an experienced writer with years of experience in the gambling industry. He has worked as a content writer and editor for five years on sites such as Oddschecker, CoinTelegraph and Gambling Industry News, bringing excellent knowledge of the world of sports betting and online gambling. Adam focuses on emerging stories in the ever changing landscape of betting in the US. Read the latest on prediction markets, changing legislation, and sweepstakes.
