Ohio Governor Plans to Double Tax on Sports Betting Once Again
Just a year after raising the state’s tax on sports wagering from 10% to 20%, Ohio Governor Mike DeWine is pushing for another doubling tax on sports betting operators. The proposed 40% tax rate would make it the second-highest in the country, behind only New York.
Make it Double
While there were many concerns about other states trying to follow Ohio and Illinois‘ footsteps–the only two states that have raised taxes on sports betting after launching their legal markets–it seems possible that Ohio could be the state that will follow the path it has set not that long ago.
It’s not so difficult to imagine that sports betting operators are not happy about the potential tax hike. DeWine has already criticized these companies, calling them “extremely aggressive” businesses that profit from Ohio residents.
However, sportsbooks argue that such a high tax rate would hurt the industry. They warn that operators may reduce promotions and bonuses, making Ohio a less attractive market for both sportsbooks and bettors.
Where the Extra Money Would Go
DeWine’s proposal could generate $130 million to $180 million per year. The money would go into a new “Sports Construction and Education Fund,” which would finance stadium projects for teams like the Cleveland Browns and invest in youth sports initiatives.
A commission of state officials would oversee how the funds are distributed.
Empire State of Mind
If the budget proposal is approved, Ohio’s 40% tax rate would be the second-highest in the U.S., just behind New York.
Higher costs for operators could lead to worse odds and fewer promotions, pushing bettors toward unregulated offshore sportsbooks.
We already know that when the tax rate is going too high, sportsbooks are not used to watch it from the sidelines. When Illinois started to consider a tax hike, major operators like FanDuel kicked off the campaign against the idea.
This is something we will probably see in Ohio, as the 40% tax rate is even much higher than recommended by the National Council of Legislators from Gaming States (NCLGS) 15-25% rate.
If this what starts to look like a nationwide push for pumping tax rates on sports betting will progress, sportsbooks might need to be a little creative. Recall DraftKings’ unfamous surcharge or the recent Sportsbook+ subscription introduced in New York.
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