Betting taxes in Ohio may soon increase significantly

Lawmakers Consider Doubling Betting Tax Laws & Regulations

Ohio Lawmakers Debate Doubling Sports Betting Tax Rate

By Lisa Spencer Senior Editor Updated: 05 July 2023

Lisa Spencer Senior Editor

As a Senior Editor at Betting.US, Lisa Spencer is a valuable member of our expert team. With a Master’s degree in Applied Mathematics, Lisa is adept in gambling theory and analyzing odds. She contributes by writing online sportsbook reviews and finding competitive markets to help our readers make an informed choice.

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The recent launch of sports betting in Ohio got off to a great start and has brought in a lot of money for both the state and sportsbook operators.

This is one of the things that has now prompted a debate over whether to double the tax rate imposed on sports betting in the state, with lawmakers considering doubling the rate from 10 percent to 20 percent.

According to reports, the doubling of the sports betting tax rate in Ohio is one of the issues that lawmakers in the state are working through as they work toward the approval of a new budget.

There are disagreements over the issue between the state House and Senate. However, it is reported that the state governor, Mike DeWine, is keen to move forward with the tax rate increase because sportsbooks performed far better in their initial few weeks than had been expected.

More Money for the State

The legalization of sports betting in states across the country has helped to bring in huge amounts in tax revenue. Ohio has already benefited financially since sports betting was legalized, but with a doubling of the tax rate, the state stands to boost state finances considerably.

An analysis was carried out by the Ohio Legislative Service Commission, and this indicated that the state could end up raking in an extra $100 million a year by doubling the sports betting tax rate to 20 percent. This would see the state collecting $135 million annually in revenue from sports betting taxes.

Not only is there debate and controversy over whether to double the tax rate, but also how the money should be spent. The Senate wants to get rid of funding for youth sports and use it for school funding. But Rep. Bill Seitz said:

We intend to fight the Senate on this issue. To my dismay, the Senate has chosen to eviscerate the original sports gaming bill in this regard by appropriating not a farthing for sports and extracurricular activities, but rather, putting it all in school funding.

At present, Ohio allocates 98 percent of revenues from sports betting taxes to the Sports Gaming Profits Education Fund, with the other two percent going toward support for problem gambling. The education funds are designed to be divided evenly between K-12 education and sports programs and other extracurricular activities.

Popularity of Betting Slides

When sports betting was first launched in Ohio, it proved hugely popular with many sports fans eager to place bets. This resulted in a handle of $1.11 billion in the state during the first full month of betting, which was January. During this time, the football season was still in full swing, so bettors were keen to place wagers.

Sports betting is now in its traditional slower period, which always leads to a reduction in betting activity. However, some believe that sports betting activity in Ohio has also been sliding because the novelty has started to wear off. In April this year, the handle had dropped to $520 million.