Ohio is no longer considering doubling its tax rate on revenue generated by sportsbooks.
Lawmakers in the Buckeye State reached an agreement on a state budget plan filed by Gov. Mike DeWine that does not include his proposed online sports betting tax increase.
DeWine filed a budget plan for fiscal years 2026-2027 that considered increasing Ohio’s tax rate on sports betting from 20% to 40%. The additional tax revenue from sports wagering was expected to fund youth sports education and support professional sports facilities.
According to a report from the Columbus Dispatch, DeWine projected the tax hike to generate between $130 million and $180 million in additional revenue annually.
The tax revenue could have been allocated toward renovations at Paycor Stadium, the home field of the Cincinnati Bengals since 2000. Ohio could have also used the revenue to help bring a multi-billion dollar stadium for the Cleveland Browns to Brook Park.
The proposed tax increase was opposed by several Republican lawmakers in Ohio including House Finance Committee Chair Brian Stewart. DeWine’s approved budget plan is set to go into effect on July 1. Ohio’s new budget will run through June 30, 2027.
Ohio raises tax rate after sports betting launch
DeWine wanted to increase the state’s current tax rate on sports betting revenue after making an adjustment to tax rates less than three years ago. In 2023, lawmakers approved DeWine’s budget plan that called for increasing the wagering tax rate from 10% to 20%.
The tax increase was implemented just six months after Ohio launched sports betting.
Ohio still weighing a tax rate change
Ohio is maintaining its 20% tax rate on wagering as Sen. Louis Blessing makes a legislative effort to make Ohio the first state to tax both handle and revenue for online sports betting operators.
Last month, Blessing filed Senate Bill 199 as a measure that adds a 2% tax on total wager dollar amounts to the state’s existing tax rate. The 2% tax also applies to brick-and-mortar wagering.
Under SB 199, the additional tax revenue from wagering is allocated toward maintaining, upgrading and building new publicly-owned sports facilities across the Buckeye State.
SB 199, introduced on May 14, was referred to the Senate Select Committee on Gaming.
Tax rate increases across America
Several states have implemented tax rate increases as Ohio shutters its plans.
Maryland Gov. Wes Moore signed a budget plan increasing the state’s tax rate on online sports wagering from 15% to 20% while Illinois is set to add a new flat tax on wagers.
The Land of Lincoln is adding a 25-cent flat tax on online sports wagers placed in the state. The new tax follows Illinois implementing a sliding scale tax rate model for sportsbooks in 2024. The scale sees operates taxed up to 40% based on their adjusted gross revenue.
Lawmakers in New Jersey compromised on a new 19.75% tax rate on gross gaming revenue for online casinos and sports betting operators after Gov. Phil Murphy submitted a new budget plan. His original budget plan proposed raising New Jersey’s tax rate on sports betting and iGaming to 25% as the state currently levies a 13% tax rate on sports betting. The tax rate for online casino operators in the Garden State is 15%.
Murphy’s 25% rate proposal was met with opposition leading to its decrease to 19.75%.
Louisiana is another state that has approved a tax rate increase this year. Last week, Gov. Jeff Landry signed House Bill 639 into law raising the state’s online sports betting tax rate from 15% to 21.5%. A portion of the tax revenue will be allocated toward the Supporting Programs, Opportunities, Resources and Teams Fund (SPORT Fund). The fund supports student-athletes at public NCAA Division 1 programs across Louisiana.
The state’s new tax rate will go into effect on Aug. 1.
