Should the state legislature agree, it would mark the second time since July 2023 that the tax was raised. In 2023, DeWine pushed through a budget that hiked the tax from 10% to 20%. That moved Ohio from a gambling-friendly tax state to one on the higher end of the spectrum.
If the tax goes to 40%, it would make Ohio the second-most expensive competitive market for wagering operators. New York has the highest tax rate at 51%. And last summer, Illinois Governor JB Pritzker initiated discussions to raise the tax in his state. Pritzker initially proposed more than doubling the 15% tax to 35%. But lawmakers went further, creating a sliding scale between 20% and 40%. The highest-revenue companies pay at the top end of the scale.
“We have known since day one that DeWine has hated sports betting,” gambling consultant Brendan Bussmann told iGB. “He apparently failed Economics 101. Definitely a head-scratcher for a Republican that continually thinks doubling the tax on a business not once, but twice, is a logical answer.”
DeWine wants stadium funding
According to the Ohio Capital Journal, DeWine wants to raise the wagering tax to fund a new “Sports Construction & Education Fund” and youth sports initiatives. The immediate use of the fund would be to finance a new stadium for the Cleveland Browns. The NFL team is currently suing the city of Cleveland for the right to move its stadium to the suburbs.
Ohio has what’s referred to as the “Modell law”. The Capital Journal writes that is “designed to make it harder for sports teams to leave taxpayer-supported venues in their home cities”.
“These sports gaming [groups] are extremely aggressive…. They’re in your face all the time,” DeWine told the Capital Journal. “They’re getting Ohioans to lose massive amounts of money every year and it seems to me only just and fair that some of the stadiums be paid for by them or a portion of it.”
According to the budget proposal, the tax increase would raise between $130 million (£105 million/€126 million) and $180 million in new tax revenue per year.
Industry: Worse products, fear of government
Every major US sportsbook is live in Ohio. Among them are BetMGM, DraftKings, Fanatics Sportsbook and FanDuel, all members of the Sports Betting Alliance (SBA).
“This would amount to a 400% tax increase over a two-year period,” SBA vice president Scott Ward told iGB. “Upstanding American businesses, who work closely with state regulators, shouldn’t have to fear government arbitrarily raising their taxes by exorbitant amounts. But that’s exactly what Ohio sports betting consumers are facing.
“This proposal will inevitably create worse products for customers, de-incentivise investment through sportsbooks’ community partners and leave far less funding for future responsible gaming initiatives.”
Ward also said that a massive tax hike would “give a huge boost to unregulated and offshore apps”. Those companies do no pay state taxes and often don’t offer responsible gambling tools. That means their costs are lower and they can offer better odds and products to consumers.
