Ohio Lawmaker Proposes Slashing State Tax Rate on Sports Betting
Ohio Sports Betting Tax: Rate Currently Stands at 20%
An Ohio state senator has introduced legislation that would reduce the tax imposed on sports betting operators in the state.
Sen. Niraj Antani in November introduced Senate Bill 190, which proposes halving the Ohio sports betting tax rate to 10%.
Here’s a closer look at what that could mean for the state.
Lawmakers Address Immediate Concerns
When sports betting launched in Ohio on Jan. 1, 2023, the tax rate was set at 10%. However, during the summer lawmakers voted to double the Ohio sports betting tax rate to 20% as a means to better support public and non-public K-12 education.
That move was supported by Republican Gov. Mike DeWine, who cited that several operators had already violated state regulations with regard to advertising. DraftKings, for example, was fined for mailing roughly 2,500 advertisements to Ohioans under the legal betting age of 21. Meanwhile, Barstool Sportsbook was fined for promoting sports betting registrations on a college campus.
In 2023, Ohioans wagered more than $7.6 billion with online and retail sportsbooks, with operators reporting a gross revenue of $936.9 million, according to the Ohio Casino Control Commission. Since then, the state has collected over $133 million in tax revenue, a significant portion of which was used to fund state public education.
Prosperous Start for State Operators
Antani argued that an increased tax rate could negatively impact a budding market. He also said that higher taxes could reduce the number of promotions and incentives for betting online. As an extension of that, there’s a fear of betting operators leaving the state because of lower profit margins.
That said, the full financial implications of Antani’s proposal are still not clear. Theoretically, that will help shed more light on the market in the coming months.
Ohio hosts many of the leading sportsbooks, including DraftKings, FanDuel, BetMGM, Caesars, and Fanatics. In addition to online betting, the state also has brick-and-mortar locations. Last year, only five U.S. states — New York, New Jersey, Illinois, Nevada, and Pennsylvania — had a higher betting handle, according to PlayOhio.
Twenty-nine U.S. states and Washington D.C. currently offer mobile betting, with North Carolina set to join the market next month. A handful of others, including Georgia, Hawaii, Mississippi, Missouri, and Oklahoma, are in the active legislation stage.
“From the commission’s perspective, we had a pretty smooth year,” OCCC spokeswoman Jessica Franks said via the Dayton Daily News. “Obviously, we did have some issues right at the beginning of the year, with some operators running afoul of our advertising rules, but once we got those addressed, we’ve seen much better compliance across the industry and haven’t really seen any issues arise since then.”
Ohioans wagered the most money in January 2023, betting a total of $1.1 billion in that month alone. October, with both college football and the NFL in full swing, was the second-biggest month at $746 million. Meanwhile, the slowest month was June with $363 million in bets placed.
Stay tuned for more updates on this Ohio sports betting tax story moving forward.
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