Proposed Ohio Sports Betting Tax Hike Does Not Appear to Have Much Traction

After raising the Ohio sports betting tax in 2023, will The Buckeye State do it again in 2025? 

As of right now, probably not. Though, it will not be for a lack of trying.

Governor Mike DeWine recently proposed a bill that would raise the tax for sports betting in Ohio from 20 percent to 40 percent—a 100 percent increase. For a variety of reasons, however, his attempt seems to be on life support. 

Immediately, it isn’t clear whether DeWine’s proposal suffers from a lack of interest. It may just be getting tied up in a jam-packed legislative agenda. Indeed, other initiatives like tax increases on cigarettes and marijuana are expected to be ditched as well.

“Day 1, I don’t think anything’s dead on arrival,” Representative Brian Stewart, who chairs the Ohio House Finance Committee, recently told the Statehouse News Bureau (via Legal Sports Report). “But I do think that any time you’re talking about tax increases in a Republican Party that’s going to get a skeptical eyebrow raise.” 

Stewart’s sentiments suggest that the state legislature simply isn’t interested in raising taxes on companies. But the Ohio sports betting tax hike bill also exists in unique territory. 

Recent Ohio Sports Betting Tax Increase May be Impacting Latest Proposal

Back in 2023, Governor DeWine championed a bill that sought to raise the Ohio sports betting tax from 10 percent to 20 percent. That measure ended up being successful. Attempting to bump up the tax again just a couple of years later may be at the root of the current opposition. 

Not only that, but there are reportedly members of the legislature who think Ohio online sportsbooks should pay less in taxes than they are right now. As Pat Evans of Legal Sports Report writes:

“The Ohio sports betting tax rate doubled in 2023 just months after the market launched. Last year, lawmakers from both sides of the aisle said the hike might have been premature. In December, a key lawmaker in legalizing sports betting proposed lowering the tax rate back to 10 percent. Now, members of DeWine’s own party will determine whether it is doubled again. The proposed increase would help pay for new stadiums in Ohio. ‘We have to be aware that every tax credit we introduce or every tax deduction that we introduce makes it harder for us to get to our ultimate goal — that being, eliminating the income tax or having a flat income tax in the state of Ohio,’ Senate President Rob McColley said.”

Once again raising the Ohio sports betting tax sure seems like a good way to supplement hopes of flattening income tax for residents. This raises the question: Why do so many lawmakers think another increase is too much? And why do they think the initial hike was premature? 

Optics could be at play. As Evans notes, the first Ohio sports betting tax rate increase came just a few months into the state’s launch. Perhaps that isn’t the greatest look. 

Ohio is Not the Only State Attempting to Raise Taxes on Sports Betting

At the same time, we have to wonder how much Ohio should care about those optics. A 10 percent tax rate was definitely below the national average for online sports betting in the United States. Even with a 20 percent tax, The Buckeye State is hardly an outlier. A handful of states actually have sports betting tax rates North of 40 percent, including New York, Rhode Island and Delaware.

What’s more, Ohio is not the only state exploring tax-rate bumps. The Indiana, Michigan and Louisiana sports betting markets have all proposed increases. Last year, the Illinois sports betting market shifted to a tier tax system. Their rates now range between 20 percent and 40 percent. 

This year, specifically, Governor Wes Moore has proposed doubling the tax rate for sports betting in Maryland. The Old Line State currently assesses a 15 percent tax. Moore wants to vault that up to 30 percent. 

Does Ohio Have The Leverage Necessary to Increase Sports Betting Taxes Again?

Online sportsbooks in the United States naturally do not want to see increases to their overhead. They will almost always lobby against tax increases. But adjustments to these rates are all about leverage. 

Bigger markets have more advantages in prospective negotiations. Zoom out, and it sure seems like Ohio should fall into the category of states with the most leverage. With sports betting in California, Texas and Georgia not yet legalized, The Buckeye State is very clearly a top-10 market. Sportsbooks want to make sure they’re operating in Ohio. This is likely why Governor DeWine was able to implement the initial raise so early into the process.

Not much has changed since then. Despite certain officials thinking the 2023 hike was premature, the Ohio sports betting market has not exactly. 

Look no further than their increase in tax revenue. In 2023, The Buckeye State received $102.1 million in sports betting tax revenue. Last year, this total climbed to $169.5 million—an increase of over 66 percent. 

Then again, this isn’t necessarily about how much money the state made. Betting volume is more important if you’re trying to sell sportsbooks on higher overhead. That argument gets a little dicier.

The 2023 Ohio sports betting handle checked in at $7.6 billion. In 2024, this number ticked up to $7.9 billion. That is roughly a 4 percent increase year over year. Growth is growth. But Governor DeWine may want to wait until The Buckeye State is coming off a larger year-over-year surge in sports betting volume before attempting to double-up the tax rate again.

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