Ohio Governor Mike DeWine is seeking to increase the tax rate on sports betting revenue from 10% to 20%, according to his recently released budget proposal for the 2024-2025 fiscal year. The proposed tax increase would apply to online sportsbooks, casinos, sports teams, and other businesses operating retail sportsbooks in the state.
Ohio’s current tax rate of 10% is relatively low compared to other states that allow sports betting. Northeastern states levy the highest tax rates on mobile and retail sportsbooks, with New York having the highest rates at 50% on retail and 51% on online sportsbooks. In contrast, DeWine’s proposed rate would match Tennessee’s current tax rate, which has been reported to be the highest rate outside of the Northeast.
Gov. DeWine’s Proposal
Since the beginning of this year, Ohio residents have been able to legally place bets on sports. However, the current tax rate of 10% on sports wagering has left some lawmakers questioning if that’s enough. In a recent proposal by Governor Mike DeWine, the tax rate on sports betting would double to 20%.
The new tax rate would apply to casinos and sports teams running sportsbooks with mobile companies such as Barstool and DraftKings Sportsbook Ohio. This increase in taxes is aimed at generating additional revenue for schools to fund athletics and extracurricular activities. Some of the revenue would also go towards addressing problem gambling and administrative costs associated with overseeing sports betting.
At first glance, the increase in taxes due to sports betting in Ohio looks to benefit the state with more revenue, but not all lawmakers have the same view. According to State Rep. Bill Seitz’s statement:
“I do not agree with this idea. A low tax rate encourages legal play through regulated entities, which we prefer compared to illegal bookmaking outfits. Moreover, betting has only been legal for a little over a month. So we don’t even know what kind of money the regulated entities are making.”
Concerns About Ohio Online Sports Betting
The Ohio online sports betting launch has been touted as a potential source of additional revenue for the state. However, some concerns are being raised about the potential cost of this move, as evidence emerges of a surge in problem gambling in the state.
Recent data from the Ohio Casino Control Commission reveals that during the first month of legalized sports betting in Ohio, phone calls to the statewide Problem Gambling Hotline more than doubled over what had been the norm ahead of the Jan. 1 launch of sports wagering. This alarming trend is raising questions about the potential risks of expanding online gambling.
Even Gov DeWine is warning that the convenience and ease of access provided by online platforms make it easier for individuals to develop gambling addictions, which can lead to a range of negative consequences, including financial ruin, relationship breakdowns, and mental health issues.
While Ohio’s proposal to increase the tax rate on sports betting to 20% is aimed at generating additional revenue to support schools and address problem gambling, there are concerns that this may not be enough to mitigate the potential negative impacts of online sports betting.
As the debate over the costs and benefits of online sports betting continues, it is clear that a more comprehensive approach is needed to address the challenges posed by this rapidly growing industry. This may include measures such as increased funding for problem gambling support services, stronger regulations to protect vulnerable individuals, and more robust public education campaigns aimed at raising awareness about the risks associated with online gambling.