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When Ohio legalized sports betting, it became the second-largest state to pledge tax revenue from the industry to fund youth sports. Six months after the official launch, the state’s new budget proposals are backing off of that pledge. The proposal includes provisions that will restrict, reduce, or possibly eliminate using the tax revenue to fund youth sports. This is despite two proposals that would double the tax rate on sports betting revenue from casinos and online sportsbooks.
The Ohio sports betting law currently calls for 98% of the industry’s tax revenue to be split evenly between the state school systems and K-12 sports leagues. Ohio has seen massive numbers in its first year with legalized sports betting, but many now believe the new revenue would be better off being spent elsewhere.
There are three versions of the budget that will be considered. One is from Governor Mike DeWine, one is from the House, and the final is from the Senate.
Gov. DeWine’s budget proposal would double the tax rate on sports betting revenue from 10% to 20%. The money would still be used to fund school sports, focusing on first reducing or eliminating pay-to-play leagues or other sports activities. The remaining funds would be diverted to support problem gambling programs across the state.
“[Mike DeWine] sees that the Ohio sports betting market is maybe a little more robust than some of the bill makers thought it may be, and they're leaving a lot of revenue on the table, “ betting analyst Robert Linnehan said of the Governor's proposal to double the tax rate.
Given the state’s early success, this measure would likely bring in enough funds to spread around to different areas. While the overall percentage going to youth sports programs could go down, the amount of money received would either stay the same or even increase.
The proposal submitted by the House would continue to fund youth sports but with a cap of $15 million per year. The proposal initially included the Governors' proposed tax hike, but it was eliminated after the House voted against it. Considering the support for the increase from both the Governor and Senate, this will be a major source of contention as the two legislative bodies meet to reach a final compromise before the budget is finalized.
The Senate proposal reinstated the tax hike that the House had eliminated but also calls for a massive cut to youth sports funding. Instead, the proposal would redirect 98% of tax betting revenue to go directly into the school systems. This is a massive departure from the proposals from the Governor and House, and it has drawn strong criticism from many representatives. The Senate and House will likely form a committee to reach a compromise soon, as the tax hike is set to go into effect starting on July 1.
Michael is an avid sports fan and a veteran bettor from Milwaukee. He learned the trade from his grandfather in Las Vegas as a kid and has turned that into a successful career. He cheers for all Wisconsin pro teams along with his Alma Mater Arizona State. He specializes in baseball betting, but has experience in football, basketball, and hockey as well. When he isn’t pouring over stats, he’s spending time with his two young children.
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