This marks the second time DeWine has sought to increase the tax, following a previous hike from 10% to 20% in July 2023. If enacted, Ohio would become the second-most expensive competitive market for sports betting operators, trailing only New York’s 51% rate.
Doubling the Tax Rate: A Boon or Burden?
DeWine justifies the proposal by emphasizing its potential to generate additional revenue without burdening bettors directly.
“These are the companies that are taking all this money outside, draining it outside the state of Ohio on gaming,” DeWine stated. “They ought to pay their fair share.”
The increased tax revenue would be earmarked for major and minor league sports facilities, youth sports programs, and education, while maintaining existing funding streams from the current 20% tax.
The Ohio sports betting market has rapidly expanded since its launch in January 2023, generating nearly $8.9 billion in wagers in 2024, a 15.9% increase from 2023. This translated to $180.8 million in tax revenue for the state, a 35.7% rise from the prior year.
The governor sees the tax increase as a way to further capitalize on this booming industry.
Industry and Lawmaker Concerns
Despite the governor’s confidence in the proposal, the sports betting industry and Ohio lawmakers have expressed skepticism.
The Sports Betting Alliance’s President, Scott Ward, warned that the tax hike
“will inevitably create worse products for customers, disincentivize investment through sportsbooks’ community partners, and leave far less funding for future responsible gaming initiatives.”
Some lawmakers have also raised concerns about the potential economic repercussions. Republican Representative Brian Stewart questioned the timing, stating,
“We’ve not even finished two football seasons and now we’re talking about quadrupling that tax?”
Similarly, Representative Bride Rose Sweeney stressed the need for further analysis before implementing such a drastic change.
“We are still realizing what that actually means to the industry. So, I think we have a lot more vetting to do.”
Gaming consultant Brendan Bussmann went even further, calling DeWine’s proposal a fundamental misunderstanding of economics.
“We have known since day one that DeWine has hated sports betting. He apparently failed Economics 101,”
Bussmann said.
Ohio’s sports betting market has already proven to be a powerhouse, ranking fourth in total betting handle in 2024, behind only New York, Illinois, and New Jersey. Some industry experts warn that a sharp tax increase could lead to OH betting apps exiting the market, ultimately reducing competition and limiting choices for bettors.
With the proposal now in the hands of the Ohio House and Senate, its fate remains uncertain. The debate over whether higher taxes will strengthen or stifle Ohio’s sports betting industry will continue to unfold, with lawmakers, industry leaders, and the public weighing the potential benefits and consequences of DeWine’s ambitious plan.
