Governor Wants to Double Ohio Sports Betting Tax
Ohio sports betting tax increased from ten percent to twenty percent two years ago. If Governor Mike DeWine gets his way, the tax rate could rise to forty percent. He aims to increase the state’s annual sports wagering revenue to around $180 million.
The decision has caused quite a stir, mainly because it can potentially hurt Ohio’s sports betting industry. A rise in betting fees is also causing concern, as it might drive sportsbook providers out of the jurisdiction and lead bettors to use illicit offshore sites.
It was against the law in Ohio to wager on sporting events until quite recently. Once the General Assembly approved House Bill 29 on December 8, 2021, the process of legalizing could begin. Bets placed at state-licensed sportsbooks by Ohio citizens aged 21 and above were authorized as of January 1, 2023.
The betting tax increased from 10% to 20% in July 2023 after lawmakers deemed it vital to generate extra state income. Governor Mike DeWine’s most recent plan may increase the percentage to 40%. If Ohio were to establish a betting tax rate of 40%, it would be the second highest in the US. Even if operators use the best sportsbook marketing strategy, it will be hard to recoup their expenses with a high tax rate.
Proposed Increase of Ohio Sports Betting Tax
Governor DeWine is primarily advocating for increasing the sports betting tax in Ohio to 40%. He says this would bring in $180 million a year, which would be used to build public facilities like sports academies and upgrade the infrastructure of current stadiums.
The Governor believes that bookies have been making a killing since sports betting became legal in Ohio on January 1, 2023. That is why he thinks the state should receive a larger share of the money made by sports betting.
Increasing the state’s annual revenue from betting taxes to between $130 million and $180 million seems like a good plan initially. Still, we must not lose sight of the fact that this tax hike may deter investors from investing in Ohio’s regulated sports betting industry.
The sports betting business is worried about the anticipated 50% tax hike. Scott Ward, Vice President of the SBA, raised several potential issues. He said that unregulated and offshore applications would benefit significantly from a hefty tax hike.
Notable bookmakers in Ohio include FanDuel, DraftKings, BetMGM, and Fanatics; if Governor DeWine’s plan is approved, these businesses will likely reevaluate their presence in the state. They will use the best practices for protecting a sportsbook.
Tax Rates in Other States
New York’s tax rate is the most expensive on a national level. Nonetheless, the sports betting sector is steady due to the state’s dense population and massive number of bettors. Meanwhile, a betting tax that is just 10% lower than New York’s might be an issue for Ohio. Neither the population density nor the fondness for wagering on sporting events are comparable.
- New York: 51% tax rate
- Delaware: 50% tax rate
- Tennessee: 19.70% tax rate
- Illinois: 15% tax rate
- Iowa: 6.75% tax rate
Governor Mike DeWine’s plan to increase the Ohio sports betting tax by 100% would fund more state needs, such as the construction of stadiums and facilities for youth sports. But the downsides can be rather significant, too. The sports betting industry in the state would fall, and punters might not come out ahead if bookmakers cut back to offset the uptick.
The biggest worry is that gamblers may avoid Ohio-licensed sportsbooks if they believe they can get a better deal at offshore betting sites. Many political news forum users are worried about the plan, and that’s understandable.
