Ohio Set to Double Sports Betting Tax Rate
LISTEN TO THIS ARTICLE:Ohio delivered an unpleasant surprise to its sports betting providers this week. Effective January 1, next year, the tax rate on sports betting will double, soaring from 10% to 20%. This alteration bears considerable implications for Ohio's thriving sports betting sector, coming just a year after the state launched its market.
The decision to double the tax rate was incorporated within the 2024-25 budgetary agreement, receiving the approval of both the Ohio House of Representatives and Senate. Governor Mike DeWine swiftly gave his approval to the bill, fulfilling a goal he has been pushing for since this past February.
Ohio Wants More Money
The Ohio House of Representatives budget release in April, which interestingly did not incorporate a tax rise for sports betting, played a role in gaining support for the tax increase plan. On June 15, a significant change was made to the budget by the legislature, incorporating the rise and finding support in both chambers.
Since its establishment in January, the sports betting market in Ohio has managed to yield approximately $507.08 million in taxable revenue. Considering the previous tax rate of 10%, this revenue would have accounted for over $50.7 million in taxes. However, with the implementation of a new tax rate of 20%, the tax revenue is projected to surpass $101.4 million if the market stays constant.
DeWine expects it to increase, though. He believes the proposed tax hike is projected to yield annual tax revenue of as much as $135 million. The majority of these funds will be allocated toward the Sports Education Fund, while the remaining 2% will be directed to the Problem Sports Fund.
Robust Market, For Now
Ohio's Casino Control Commission (OCCC) made headlines in January with the launch of 16 online platforms and 13 land-based sportsbooks. Renowned national operators like Barstool Sportsbook, FanDuel, BetMGM, DraftKings and Caesars joined the mix, injecting further vitality into the state's burgeoning sports betting scene.
With a total of 18 sports betting sites now operating in Ohio, the market continues to flourish and evolve. However, the new tax plan could cause some of them to reconsider their future in the state.
Kindred, the global gaming giant, previously warned that it would exit states that weren’t “economically viable” after pulling its Unibet brand out of Iowa. It also had its eye on Ohio, but that appears to be off the table.
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