Ohio Senate Approve Sports Betting Tax Increase Legislation

The Ohio sports betting tax rate could be raised to 20% on sportsbook taxes, up from the current 10% rate. While the House did not take up the initial proposal to increase the tax rate in HB 33, the Senate amended it. The Senate passed the amendment, which will now head to the House.

Both chambers will meet for a conference committee with the goal of passing legislation before the start of FY 2023-2024. The fiscal year begins on July 1.

Higher Ohio Sports Betting Taxes Would Mean More State Revenue

Gov. Mike DeWine pushed for the increased tax rate just weeks after the market went live. Ohio jumped to becoming one of the biggest sports betting states in the country. Gov. DeWine saw this as an opportunity for the Buckeye State to cash in even more.

“The bill increases the rate of the state’s sports gaming tax, from 10% to 20%. Under the continuing law, the tax is levied on the “sports gaming receipts” of online and in-person sports gaming businesses, other than those that offer gaming through lottery terminals. A business’ sports gaming receipts include the total amount the business receives as wagers, less winnings paid, voided wagers, and, beginning in 2027, a portion of the promotional gaming credits wagered by patrons. The rate increase applies to sports gaming receipts received on and after July 1, 2023.”

(R.C. 5753.021; Section 803.40)

There is no gauge as to whether or not the House will be on board for the amendment. Both chambers will meet in the coming days to discuss the issue. Lawmakers will have to move quickly in order to pass legislation in time.

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How Ohio Would Benefit From The Increase

The Ohio betting market has been a dominant one. The best sports betting sites have helped push the market to more than $3 billion in wagers, $451 million in revenue, and $45.2 million in taxes.

Had the market been set at 20% since launch, the state would have collected more than $90 million in taxes so far. This is more funds to be used for several programs in the state. It is understandable why Gov. DeWine is looking to increase the tax rate in Ohio.

Keep in mind these gaudy numbers are not even for a full year, after Ohio just launched sports betting on January 1, 2023. There’s no telling what sports betting handle could be for the second half of the year with a full college football and NFL season coming.