Ohio to Consider Doubling Tax Rate for Sports Betting Operators

Governor Mike DeWine doesn’t think online sportsbooks are paying their fair share.

DeWine has begun a new push to double the sports betting tax rate for online operators in Ohio. The state’s top lawmaker hopes to add the change to the budget. His proposal would raise the rate from 20% to 40%, making it one of the highest in the country.

According to projections shared by DeWine, the move could add another $100+ million annually in tax revenue.

DeWine did not mince words when asked why he believed a tax hike was justified. He cited the aggressive marketing tactics of sportsbooks, leading to Ohio residents losing more money.

“These sports gaming [groups] are extremely aggressive…” DeWine shared in an interview with the Ohio Capital-Journal. “They’re in your face all the time. 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.”

The Buckeye state doubled its tax rate in 2023 from 10% to 20%.

Battle of Public Opinion Begins

DeWine has been so eager to share his desire to raise the rate to get a headstart in the battle of public opinion. States across the country have tried and failed to raise tax rates on online sportsbooks, largely thanks to blowback from bettors in the state. 

With Ohio’s Governor essentially throwing the gauntlet down, it is the industry’s turn to respond. We have seen the playbook operators use, promising to water down odds and offer fewer promotions to compensate for the losses from a higher tax rate. This means less money in the pockets of Ohio bettors, which will lead to many opposing the measure.

While most states have failed to raise their rates, Ohio did so successfully once without damaging its thriving sports betting market. Time will tell if they can do so again.