Ohio Governor Seeks to Double Sports Betting Tax to 40%
Ohio Governor Mike DeWine unveiled his final budget proposal this week and it includes a huge tax increase on sports betting operators, raising the rate to 40%.
LISTEN TO THIS ARTICLE:If approved by the state legislature, this would be the second increase in less than two years. In July 2023, DeWine’s budget raised the tax from 10% to 20%, pushing Ohio from a relatively low-tax gambling state to one with a much higher burden on operators.
A 40% tax rate would make Ohio the second-most expensive regulated sports betting market in the country, behind only New York, which levies a 51% tax. Illinois Governor JB Pritzker also explored a tax hike last summer, initially proposing an increase from 15% to 35%. However, lawmakers ultimately introduced a sliding scale between 20% and 40%, with the largest operators paying the highest rate.
Tax Revenue to Fund Stadium Projects
According to the Ohio Capital Journal, DeWine plans to use the additional tax revenue to establish a new “Sports Construction & Education Fund”, which would support youth sports and stadium projects. The main purpose of the fund would be financing a new stadium for the Cleveland Browns.
Ohio has a law known as the “Modell Law”, which is designed to make it more difficult for professional sports teams to leave taxpayer-funded venues in their home cities.
These sports gaming [groups] are extremely aggressive…. They’re in your face all the time. They’re getting Ohioans to lose massive amounts of money every year and it seems to me only just and fair that some of the stadiums be paid for by them or a portion of it.
If implemented, the tax increase is projected to generate between $130 million and $180 million in additional annual revenue.
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Industry Concerns Over Market Impact
Ohio hosts every major sportsbook in the U.S., including BetMGM, DraftKings, Fanatics Sportsbook, and FanDuel, all of which are members of the Sports Betting Alliance (SBA).
SBA Vice President Scott Ward has spoken out against the proposal. He said that it would be a 400% tax increase over a two-year period, which would be extremely unfair on sports betting operators and customers.
Ward added that such a dramatic tax hike would result in a poorer experience for bettors, reduced investment in community partnerships, and fewer funds for responsible gambling initiatives. He also warned that higher taxes could push consumers toward offshore betting platforms that operate without regulatory oversight.
RELATED TOPICS: Regulation
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