Ohio has increased its tax rate on sports betting from 10% to 20%. The move comes as a result of an agreement by the Ohio House of Representatives and Senate for a state budget for fiscal year 2024-2025.
The budget, worth $85.8 billion, went into effect on Saturday after it was signed by Gov. Mike DeWine. The Governor has reportedly been suggesting the rate hike since February, just a month after sports betting was launched in the state.
In April, the Ohio House of Representatives released its version of the budget but did not include the Sports betting tax rate hike. However, more recently, on June 15th, the Senate amended the House version of the budget and included the provision.
Mike DeWine, Governor, Ohio
In January, the Ohio Casino Control Commission (OCCC) launched 16 digital platforms and 13 retail locations, including national operators Barstool Sportsbook, BetMGM, Caesars, DraftKings, and FanDuel. The state now houses 18 live platforms.
Since its launch in January, Ohio’s sports betting market has generated over $507.08 million in taxable revenue. The total tax generated from this revenue, at the 10% rate, was over $50.7 million. At a 20% rate, that figure would have doubled to $101.4 million.
After the new tax rate gets implemented, the state projects that it could generate an additional $100-$135 million in tax revenue a year. Most of that revenue will be funneled to the Sports Gaming Profits Education Fund, while 2% of the tax revenue will be directed to the Problem Sports Gaming Fund.
However, not all projections are positive. Some critics have also pointed out that the increase in the tax rate could lead to the smaller platforms being priced out of the state. Americans for Tax Reform called the increase a “tax risk” and noted that at the current 10% rate, Ohio operators are “already on pace to deliver the revenue that the Senate budget predicts under the proposed tax increase.”
Former Ohio lawmaker Dan Dodd took to Twitter to say the state might lose on licensing fees and could potentially see a decline in the number of operators in the state.
At a 20% tax rate and in current environment, it’s not hyperbole to predict Ohio will have 10 or fewer mobile operators offering bets in 12-18 months. State will also lose over $10m in license fees (unless proprietors pay for license themselves hoping to get a new operator).
— Dan Dodd (@dan_dodd) June 30, 2023
Apart from the increase in the tax rate, the budget also saw a provision wherein the state regulators can put bettors on the involuntary self-exclusion, if “the person has threatened violence or harm against a person who is involved in a sporting event, where the threat was related to sports gaming and made before, during, or after a sporting event.”
Original article: https://www.yogonet.com/international/news/2023/07/03/67761-ohio-doubles-sports-betting-tax-rate-from-10-to-20-
