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Sports Betting Tax Hike in Ohio Laws & Regulations

Sports Betting Tax Hike in Ohio Should Benefit Education Fund

By Lisa Spencer Senior Editor Updated: 14 August 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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Last month saw the sports betting tax in Ohio rise from 10 percent to 20 percent, doubling the amount of tax payable by sports betting operators in the state.

While this has proven bad news for sports betting operators, it will have a huge positive impact on the Education Fund in the state. The new tax rate was approved by the state governor, Mike DeWine, in the new budget.

According to reports, K-12 institutions across Ohio will reap the financial rewards of the new tax rate over the next five years. Data suggests that it could bring in more than $350 million in the next five years, and this is based on sports betting in the state generating $9-$12 billion a year in total sports betting handle.

Sports Betting Thriving in Ohio

Sports betting in the state went live at the start of this year and has been thriving, despite the slow period that the state is currently experiencing.

A report in PlayOhio read:

Ohio’s year-to-date tally is now over $3.8 billion in betting volume — an impressive feat for its first six months. July is likely to be another light betting month, but things will seriously heat up once the NFL returns in late August through the end of the year.

At present, all sports betting states are experiencing a slow period, which is traditionally seen during the summer months because of the slower sports events schedule. This will change when the football season begins, and the busier schedule will last until spring next year, all the way up to the Super Bowl and March Madness.

Majority of Tax Money Goes to Ohio Education Fund

The new tax rate is set to benefit K-12 institutions because the majority of the tax money goes to the Ohio Education Fund. In fact, 98 percent of the money will go to the Education Fund, and this could equate to a huge influx of cash based on the new tax rate.

Over the next five years, Ohio sportsbooks are expected to make $3.625 billion in taxable revenue. Based on the new tax rate, this means sports betting taxes of $725 million, of which $718 million – 98 percent – will go to K-12 institutions and athletic programs across the state. The figure under the old tax rate would have been $359 million.

Of the $718 million that the Education Fund stands to receive, 50 percent will go toward funding education programs in the state. The remaining 50 percent will go toward the funding of extracurricular activities and interscholastic sports.

Public and private K-12 institutions will benefit from extra funding, and the processing of funds is set to be carried out through the General Assembly of Appropriations. Priority will be given to schools that currently have more limited budgets to fund these types of activities.

Based on these figures, K-12 education could benefit from an extra $1.435 billion in funding over the next two decades. At present, the state’s expenses for education come in at $11.65 billion.