Ohio Sports Betting Handle To Be Taxed By New Bill
A recent legislative proposal in Ohio, spearheaded by Senator Louis Blessing, aims to position the state as a trailblazer by introducing a dual tax structure on betting—a groundbreaking move for the U.S. gambling landscape.
Understanding the Proposed Tax Structure
Senate Bill 199 (SB199) advocates for a 2% tax on total wagers placed by bettors, in addition to the existing 20% tax on adjusted gross revenue for online sportsbooks. Should this bill pass, Ohio will be the first state in the U.S. to enforce both these taxes concurrently. Notably, Tennessee has implemented a 1.85% tax on betting handles, but this is exclusive of revenue taxation. This proposal arises in the context of a failed attempt by Governor Mike DeWine to elevate the revenue tax rate from 20% to 40%.
The projected revenue from this additional tax is intended to support the maintenance and construction of publicly-owned sports facilities statewide, reflecting a commitment to reinvestment in community infrastructure.
Potential Impact on State Revenue
Currently, Ohio has generated approximately $359 million since the legalization of sports betting in early 2023, with local bettors wagering around $19 billion. Implementing a 2% tax on the betting handle could potentially yield an additional $380 million, a substantial increase given the growing betting trends. For instance, betting handle surged by 15% in 2024, reaching $8.9 billion, up from $7.7 billion in 2023, and January alone saw wagers surpassing $1 billion, almost matching the record of $1.13 billion staked during the same month of the previous year.
It is crucial to note, however, that unregulated platforms may be siphoning off even more betting action. Recent reports estimate that unlicensed operators accounted for $1.5 billion in wagers last year, starkly contrasting the $899 million from licensed sportsbooks.
Exploring Online Casino Legislation
In addition to the proposed tax structure, lawmakers are examining avenues to further enhance state revenue through gambling. The discussion has shifted to the prospect of legalizing online casinos in Ohio, bolstered by bipartisan support for a recent bill introduced by Senator Nathan Manning. This bill anticipates a tax rate of 36-40%, projecting an estimated $400 million in tax income.
Just like sports betting, unregulated online casinos are believed to be generating substantial revenue, with estimates of $3.7 billion last year. In total, an estimated $7 billion was generated from Ohio residents across both regulated and unregulated markets, nearing New York’s $7.3 billion. Despite having a tax rate exceeding 50% on gambling, the New York market realized over $1 billion in tax revenues.
Conclusion: A Strategic Shift in Ohio’s Gambling Landscape
SB199 represents the latest attempt by Ohio lawmakers to capitalize on the burgeoning popularity of gambling within the state. With a deadline approaching for the bill to pass through various committees by year-end, the legislative landscape is poised for significant evolution, potentially setting a precedent for other states to follow.
Author Bio
Adam Roarty is a seasoned writer with extensive experience in the gambling industry. He has contributed as a content writer and editor for diverse publications, including Oddschecker, CoinTelegraph, and Gambling Industry News, demonstrating profound expertise in sports betting and online gambling matters.
