Ohio has doubled its sports betting revenue tax rate from 10% to 20% after Gov. Mike DeWine’s hike was granted in the fiscal 2024 and 2025 budget.
Sitting deep on page 1103 of 1211 of the HB33 comparison document, the ‘Sports gaming tax rate’ change is explained.
The change simply states that the law will “increase the sports gaming receipts tax rate, from 10% to 20%, beginning July 1, 2023.”
The anticipated fiscal effect is as follows: “Will increase sports gaming tax receipts. Likely by $100 million to $135 million per year. Revenue gains would be deposited into the Sports Gaming Profits Education Fund (98%) and the Problem Sports Gaming Fund (2%).”
As with most US legislative battles, a drawn out affair saw Gov. DeWine suggest the tax rate increase as early as February, just a month after Ohio sports betting went live. Come April, the House of Representatives approved a different version of the budget that explicitly did not include the sports wagering tax hike.
The Senate then amended the House version and re-included it. The final version that passed, instead, excluded the provision that would have seen Ohio’s biggest counties able to house up to 7 land based sportsbooks, up from the current stipulation of 5.
The adjustment puts the sports betting tax rate further in-line with Ohio’s other gambling tax rates. Ohio places a 33 percent tax on casinos’ gross gaming revenue, with racinos paying 33.5 percent on their electronic gaming devices.
Ohio sports betting has generated tax receipts of little over $50 million, where state-wide, Ohio tax revenue from gambling related activities saw receipts rise above $780 million for FY22.
Sports betting is but a small segment of the pie, but given sports betting has barely been live for six months as of the first tax hike, it goes to shows the regulators very much have their finger on the pulse of what operators are generating, both in Ohio and elsewhere.
Ohio had a very competitive sports betting tax rate, but with New York online sports betting charging a rate of 51 percent, several states may have been reconsidering their tax position.