Ohio Lawmakers Double Tax Rate on Sports Betting Operators in New State Budget

Ohio state lawmakers passed a $86.1 billion state budget Friday that would double the tax rate on sports betting operators to 20% starting this month. 

The change in the sports gaming tax rate from 10% to 20% is expected to boost Ohio’s sports betting tax revenue by $100 million to $135 million annually, according to a fiscal note on the fiscal year (FY) 2024-2025 budget bill (House Bill 33) approved by lawmakers yesterday. Of that revenue, 98% would go to education with the remaining two percent earmarked for problem sports gambling programs. 

HB 33 now goes to Ohio Gov. Mike DeWine to be signed into law. According to the Associated Press, lawmakers voted Friday to give themselves until July 3 – past the constitutional deadline of June 30 – to get the bill to DeWine for his signature. The state fiscal year in Ohio traditionally begins on July 1.

The increase on sports betting operators was originally proposed by DeWine early this year. 

Both the Ohio Senate and House approved the new budget on deadline Friday after reaching agreement on the sports betting tax change (and hundreds of other budget differences) in a budget conference committee earlier in the week. The tax increase had been added to HB 33 by the Senate on June 14 after being omitted from the bill by the House back in April. 

Budget Leaves Out Sports Betting Tax Funding for K-12 Athletics

Increased revenue from a beefed-up tax on sports betting operators would not be used to support school athletics under the new state budget passed by lawmakers Friday. 

Current Ohio law requires that 50% of funds in the state’s Sports Gaming Profits Education Fund be used to support K-12 athletics and other extracurricular programs. The budget approved Friday would require revenue allocated to the fund be spent on “general support” of public and non-public K-12 education instead. 

The result would be $15 million less in each fiscal year for K-12 athletics and other extracurricular activities statewide, according to the conference committee report on HB 33.

Lawmakers also left out of the final budget a House proposal to increase the maximum number of retail sportsbooks allowed in Ohio’s largest cities from five to seven, while maintaining a statewide cap of 40 sports betting facilities at any given time. That limit does not, however, include “Type C” sports betting kiosks at hundreds of restaurants, bars, and other locations statewide. 

Instead, the budget passed Friday would add microbreweries and licensed breweries, wineries, and distilleries that operate a bar or restaurant on-site to the list of state liquor permit holders allowed to apply to host a Type C sports betting kiosk. 

Ohio Sports Betting Tax Revenue Dips in May

The tax increase on sports betting operators was approved by state lawmakers in Columbus on the same day that Ohio sports betting taxable revenue data for May was released by the Ohio Casino Control Commission. That data shows a 9.2% decrease in taxable revenue in May from the previous month.

Total taxable revenue for May was $57.8 million – down from $63.7 million in April, according to the OCCC. Approximately 97% of the May taxable revenue came from online sportsbooks. 

Ohio has generated approximately $50.7 million in total state revenue from sports betting since Jan. 1. That’s when online and retail sports betting first launched in the Buckeye State. 

About the Author
Rebecca Hanchett

Rebecca Hanchett

Legislative Writer
Based in Kentucky's Bluegrass region, Rebecca Hanchett is a political writer who covers legislative developments at Gaming Today. She worked as a public affairs specialist for 23 years at the Kentucky State Capitol. A University of Kentucky grad, Hanchett has been known to watch UK. basketball from time to time.

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