Ohio Sports Betting Tax Doubled After DeWine Signs Budget

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Ohio sports betting

Gov. Mike DeWine had his Ohio sports betting wish granted in the fiscal 2024 and 2025 biennial budget.

Operators of Ohio sportsbooks will now pay a 20% tax on sports betting revenue, which is double the 10% approved by the legislature in late 2021. DeWine is expected to sign the budget this week.

The change became effective July 1, meaning all betting revenue in the state from in-person and online sportsbooks is subject to the higher tax rate. Revenue from Class C operators that take sports bets through the Ohio Lottery is not affected by the change.

Will Ohio sports betting tax change stick?

The question now is whether that tax increase to 20% will actually survive, according to a report from PlayUSA.

Rep. Bill Seitz said the legislature will take another look at the tax rate in a future study commission on gaming in Ohio. That was part of the agreement for the House to accept the increase in a budget conference committee, he said.

“The explanation given to me is we went along with the 20% but we fully expect the gaming study commission, which will be a bunch of legislators, would come back and say that the tax shouldn’t be 20%,” Seitz said.

Seitz does not believe governor’s reasoning

Seitz also said he did not concur with why Gov. DeWine said the tax rate needed to be raised:

“The governor’s argument, which I didn’t buy for a minute, is ‘Look at how much money these folks are spending on advertising. They’re trying to get people hooked on sports gaming and mobile apps. We need to curb the excessive advertising by the mobile app licensees, and how better to do that than double the tax rate.’”

Ohio sports betting results so far

Ohio sports betting revenue from online and in-person sportsbooks stands at $507.1 million through the first five months.

The legislators that crafted the bill chose not to let operators deduct promotional costs from taxable revenue until 2027.

That means that 10% tax was not diluted by promos, as has been the case with other recent state launches.