Governor Mike DeWine has proposed doubling Ohio’s sports gaming tax rate from 20 percent to 40 percent, following a similar increase from 10 percent to 20 percent two years ago. If approved, Ohio would rise in national rankings for sports betting taxation, significantly impacting operators, bettors, and the state’s economy.

Ohio’s current sports betting tax landscape

Ohio legalised sports betting on 1 January 2023, and it became profitable overnight. Since then, the state has amassed a staggering $1.83 billion in taxable revenue, with $904 million coming in just last year. The current 20 percent tax rate, already among the highest in the country, has provided significant funds for various state initiatives.

Ohio currently holds the sixth-highest sports betting tax rate. If approved, the proposal will surpass states like Pennsylvania and move into the top four. Meanwhile, Michigan, Ohio’s northern neighbour, maintains one of the lowest rates at just 8.4 percent, making it an attractive alternative for operators and bettors.

The proposed tax increase to 40 percent

Governor DeWine’s proposed legislation will bring in an additional $288 million over the next two fiscal years. His argument is simple: sports betting operators should contribute more to state projects, given their aggressive marketing campaigns and revenue generation. The proposed tax hike would place Ohio just behind New Hampshire, New York, and Rhode Island, which tax sports betting at 51 percent.

“We have seen the sports gaming companies do massive advertising to reach people all over Ohio and entice them into gaming. It makes sense that these sports gaming companies need to give something back,” DeWine said during a stop in northwest Ohio on Tuesday.

DeWine stated, “Ohio citizens are giving, every single day, millions of dollars to the sports gaming companies. It’s time for us to raise the tax on them so that we can do things to help Ohioans. It seems to me a very logical approach.”

The governor’s budget plan specifies that the increased tax revenue will cover up to 40 percent of stadium project costs, encourage youth sports participation at the grassroots level, and establish a new oversight commission to decide on funding allocations.

Reactions to the proposed tax hike

The proposed increase has sparked mixed reactions across the state.

Republican lawmakers’ concerns: House Finance Committee Chair Brian Stewart noted that doubling the tax again so soon raises scepticism within the GOP-led legislature.

Stewart said, “We’ve not even finished two football seasons, and now we’re talking about quadrupling that tax? I think that’s going to generate a lot of discussion. I don’t think anything’s dead on arrival, but I do think that any time you’re talking about tax increases in the Republican Party, that’s going to get a sceptical eyebrow raise.”

Industry opposition: The Sports Betting Alliance, representing major sportsbooks like DraftKings and FanDuel, criticised the move, warning of negative impacts on customer experience and investment.

“This proposal will inevitably create worse products for customers, disincentivise investments through sports books’ community partners, and leave far less funding for future responsible gaming initiatives,” stated Scott Ward, vice president of the Sports Betting Alliance. This industry group represents DraftKings, FanDuel, BetMGM and Fanatics.

County officials’ support: Hamilton and Cuyahoga County officials praised the plan, highlighting its potential to support stadiums and community programmes.

In a joint statement provided by county spokeswoman Bridget Doherty, three commissioners said, “This smart, sustainable funding solution ensures that those who fuel the sports industry also invest in its future, easing the burden on Hamilton County taxpayers. We urge the state legislature to seize this opportunity to leverage the booming sports betting industry to invest in the very facilities that help drive sports betting in the state and ensure Hamilton County remains the home of the Bengals and Reds.”

Cuyahoga County spokeswoman Jennifer Ciaccia’s reaction was also friendly, though more tempered.

Cuyahoga County spokeswoman Jennifer Ciaccia stated, “We are pleased to see that in his budget, Governor DeWine has recognised the importance of sports facilities to the state of Ohio and the state’s role in financing those facilities. We look forward to learning more about the proposal and how it may impact funding for the three professional sports facilities in Cuyahoga County.”