Ohio Senator Niraj Antani Introduces Legislation to Lower Sports Betting Tax
LISTEN TO THIS ARTICLE:In an effort to rejuvenate the sports betting industry in Ohio, State Senator Niraj Antani, a Miamisburg Republican, has put forward new legislation that would cut the state’s tax on sports betting operators.
Significant Opposition to Tax Reduction
Originally, Ohio’s sports betting operators were taxed at a rate of 10% when the market launched at the start of the year. However, over the summer, lawmakers decided to increase this tax rate to 20% as part of the state budget, which Senator Antani is now challenging with is bill.
Governor Mike DeWine, also a Republican, supported the tax increase, voicing his concern about what he saw as overeager advertising by sports betting operators. He pointed to incidents where regulatory fines were imposed on major companies such as DraftKings and Barstool Sportsbook for various infringements, including advertising to underage individuals and hosting non-compliant events.
Since the tax hike, the amount wagered on sports in Ohio has grown to $5.2 billion, with $4.5 billion paid back in winnings. This increase in tax has also caused a cultural shift, with greater acceptance of legal sports betting among professional and collegiate leagues and sports media.
Concerns Regarding State Revenue
The financial effects of Senate Bill 190 are still being assessed, as the Legislative Service Commission has not yet released a revenue forecast. However, there will certainly be concerns regarding its impact on the state’s revenue. From January to October, Ohio collected almost $102 million in taxes from sportsbooks.
Senator Antani has openly criticized the decision to hike the sports betting tax as part of the budget process. He argues that this negatively impacts the market by affecting not only the sportsbooks but also the bettors, who may face less favorable odds and fewer promotions as a result of the high tax rate.
Antani is not alone in his criticism. Others have expressed concern that the higher tax could make Ohio a less appealing market for sports betting companies. Critics such as former Ohio Rep. Dann Dodd and Americans for Tax Reform have cautioned that this move could push current operators out of the market, potentially leading to significant economic repercussions for Ohio.
As of March 2023, 29 states in the US have legalized sports betting, with tax rates generally between 10% and 15%. However, there is a huge range from Iowa’s low of 6.75% to Rhode Island’s high of 51%, showing that there is no consensus regarding the best tax rate to encourage industry growth while bringing in substantial government revenue.
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