Ohio poised to double sports betting tax rate to 20%

calculator reading Double Tax
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The Ohio House and Senate have reached an agreement on a budget for the state and that budget means big things for the sports betting industry in the state.

The budget conference committee agreed on a version of the budget that would double the current tax rate of 10% on sports betting to 20%. Gov. Mike DeWine proposed the increase in his version of the budget, but the House did not include it. The Senate put the measure back in and it remained in the version that emerged from the conference committee.

Ohio projects $100M-$135M in new sports betting tax revenue

The state projects that this would generate an additional $100-$135 million in tax revenue a year. DeWine put forth his idea in February after the first month of numbers out of the state showed more than a billion in handle and a huge market. Since then, sportsbooks have not put up the same kind of numbers, however, the decline corresponds with the natural ebbs and flows of the sports calendar.

Critics suggest that the increased rate will not be the boon the state thinks it is. Former Ohio lawmaker Dan Dodd summed up the potential issue on Twitter:

The state currently has 18 sportsbooks, but many are struggling to capture even a fraction of a percent of the market. In May, four operators generated less than $100,000 in revenue while one, Superbook, operated at a loss for the month.

Altogether in May, operators spent more than $23 million of their nearly $56 million in revenue on promotional credits, which amounts to more than 40% of total revenue. With the effective start date of July 1 (Saturday), this could mean that, come football season, there could be fewer start-of-football promotions during what is considered peak acquisition season.

New law regarding abusive bettors and the self-exclusion list

The tax rate is not the only sports betting change in the budget either. As DeWine said he would, he included a provision that the state regulators can put bettors on the involuntary self-exclusion list 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.”

Problem gambling study out, growth of gaming study in

The Senate attempted to require the OCCC to contract with state schools to produce a report on problem sports betting at the college level funded by the sportsbooks, but this measure was removed in the final version of the bill.

The study that did end up in the final bill was one looking at the future of gaming in Ohio. It expands the existing Joint Committee on Sports Gaming and renames it the Study Commission on the Future of Gaming in Ohio. The group will need to submit a report and recommendations to the General Assembly in 2024.