HomeOhio Sports Betting NewsOhio Doubles Sports Betting Tax Rate to 20% in New Budget

Ohio Doubles Sports Betting Tax Rate to 20% in New Budget

Ohio is set to increase its sports betting tax by doubling the current rate to 20 percent as part of the new 2024–2025 executive budget. The new tax rate is expected to take effect from the start of the next fiscal year, beginning July 1, 2024.

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Adjusting the betting tax is one of the provisions within House Bill 33, a budget bill that passed the state’s Senate and House. It comes after Ohio legalized sports betting activities in late December 2021 and the launch of the state’s legal mobile and retail sports betting market on January 1 of this year.

Governor Mike DeWine recently announced that the new 2024–2025 budget had been approved. It allows the state to make strategic investments while supporting families and communities.

According to DeWine, the new budget is focused on investing in Ohio’s economy, communities, and families. It ensures the sustainable growth and prosperity of the state.

Representative Bill Seitz said that the increase in the sports betting tax rate aims to reduce the excessive number of sports betting advertisements in the state. DeWine argues that these advertisements aim to hook people on sports gaming and mobile betting apps in OH.

“The governor’s argument, which I didn’t buy for a minute, is ‘Look at how much money these folks are spending on advertising,” said Seitz.

“We need to curb the excessive advertising by the mobile app licensees, and how better to do that than double the tax rate.”

The Commission projects that the higher tax rate will generate between $100 million and $135 million annually. All the funds allocated to education, except for two percent set aside for the state’s problem sports gaming fund.

In the first four months of 2023, the Sports Gaming Profits Education Fund resulted in a notable increase of $44.9 million in state revenue directed toward supporting public and nonpublic education for young children.

Governor DeWine expressed pride in signing the budget, which facilitates investments in the state while supporting and encouraging the well-being of Ohio’s children and families. He emphasized the significance of helping those facing various challenges.

Concerns Surrounding Tax Hike

Not everyone, however, shares optimism regarding the tax hike’s impact. Dan Dodd, a former Ohio state lawmaker, expressed concerns that some operators may choose to leave the state due to the higher tax rate.

Currently, Ohio has 18 licensed operators. Dodd believed that doubling the gambling tax might strengthen the hold of casinos and racinos rather than break up their dominance.

Seitz also explained that the initial decision to set the tax rate at 10 percent in the original bill was a deliberate strategy to encourage advertising and lure people away from illegal betting activities towards legal and regulated options.

“When you double the tax rate, that’s maybe not the smartest thing to do,” he said.

In its early months, legal sports betting in Ohio proved to be successful. It generated $507 million in revenue and contributed $50.7 million to the state’s coffers.

“To me, sports betting has proven to be very successful in Ohio, so why would you mess with success? So I was against it and never dreamed we would end up doing it, but there you go.”
Bill Seitz, Ohio State Representative

The recent announcement about the new budget comes on the heels of the Ohio Casino Control and Lottery Commission’s report on the state’s 11 casinos and racinos’ performance in May.

According to the findings, these establishments generated total revenue of $196 million in May, indicating a slight decline compared to the $202 million recorded in the same month in 2022.

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