Ohio Unlikely to Raise Tax Rate on Sports Betting Operators

It appears that sportsbooks in the Buckeye State will avoid a proposed tax hike.

Ohio lawmakers are considering a proposal to double the state’s sports betting operator tax rate as a part of the budget. However, reports from inside the state legislature suggest that the measure is unlikely to pass.

Governor Mike DeWine included the proposed hike. The state’s top lawmaker shared that he believes sportsbooks aren’t paying their fair share, but it doesn’t seem that many of his fellow Republicans agree. 

“Day 1, I don’t think anything’s dead on arrival,” House Finance Committee Chair Rep. Brian Stewart told the Statehouse News Bureau. “But I do think that any time you’re talking about tax increases in a Republican Party that’s going to get a skeptical eyebrow raise.” 

The proposed hike comes just two years after Gov. DeWine successfully raised the operator tax rate from 10% to 20%. That effort is still facing challenges, with a bill to lower the rate back to 10% also being introduced.

While the proposed hike isn’t officially dead yet, it appears the effort is doomed to fail.

Tax Hike Proposals Continue to Fail

Ohio will be the latest of many states to fail at raising their sports betting operator tax rate. Markets across the US have attempted to enact varying hikes, but almost all have failed. 

The biggest roadblock for these tax hikes is the impact on the market. While a higher tax rate would bring in more money on paper, sportsbooks would offset those losses by offering fewer bonuses and watered-down odds. This would mean lower payouts for bettors, making the idea hard to sell to voters.

Gov. DeWine’s latest proposal will likely fail, but he may not give up the fight. The state could look to a Midwest neighbor in Illinois as an example. The Land of Lincoln implemented a tiered tax system instead of a hike, which helped overcome opposition from the industry.