Ohio Considers Cutting Sports Betting Taxes

This is a headline we’re not used to writing — legal sports betting states talking about cutting taxes. Most of the time, especially in this relatively-new industry, the discussion is on raising the tax rate.

Welp, sports betting in Ohio is the outlier in this case. But here’s the thing: it’s only a proposal. And frankly, if we had to bet on it, we’d say the proposal will fail to pass. Still, it’s an interesting talking point. Keep reading and we’ll tell you all about what’s going on in Ohio.

Senator Wants To Halve Betting

Senator Niraj Antani is behind proposal SB 190, a bill that wants the cut the Buckeyes State’s sports betting tax in half. Antani wants to move the tax rate to 10 percent from the 20 percent it currently is. His reasoning? Competitive advantage.

“The 20 percent rate makes us the sixth highest out of the 38 states with sports betting,” Antani has written. “This puts us at a significant regional and national disadvantage.”

Here’s the thing: when betting sports launches in the state, the tax rate was indeed 10 percent. Last year, Governor Mike DeWine proposed the 20-percent rate, which the legislature included in the 2024-25 budget.

Question is: will SB 190 stand a chance? Well, the lawmakers are meeting in December. However, it’s effectively a lame-duck meetup since there will be turnover after the 2024 election. All this is to say we doubt anything changes, not only because of the lame duck situation, but the bill itself.

The genie is effectively out of the bottle. Now that the tax rate is higher, it’s very hard to dial it back. Whether you’re a politician or average Joe, no one readily accepts taking in less money from year to the next. Not only that, but Antani’s reasoning is flawed. How is it a competitive disadvantage? Most Ohio bettors can’t just leave the state and readily bet elsewhere. All this is to say don’t get your hopes up about SB 190.

Antani Pushes Other Betting Bills

The Senator is eying other bills too. This Fall, Antani also introduced a bill to legalize online casino in Ohio. The state has in-person casinos, but no iGaming is allowed. But don’t get your hopes up — not yet at least. Antani introduced the bill more as a conversation-starter than anything else.

“A journey has to start somewhere,” Antani said. “We want to kickstart the process. A good group of legislators are thinking thoughtfully about this issue, but many of my colleagues haven’t had the opportunity, and I hope this will start the conversation.”

Online casinos are not in fashion yet. Whereas sports betting is legal in 39 of 50 states (and in Washington DC), iGaming is only legal in seven places. Two of those legal states are neighbors to Ohio. Betting in Michigan and Pennsylvania both allow casinos — and it’s big business for both.

We think many states, including Ohio, will eventually come around to online casinos just as they did for sports betting. The question is more when that is. Is it next year? Three years? Five years? Our guess is in the middle, in that three-year timeframe. Something like 2027-28 seems possible.

Ohio Betting Continues Putting Up Big Numbers

In other betting news, sports betting keeps on humming in Ohio, especially during football season. The Ohio Casino Control Commission just reported numbers for Ohio 2024 — the first full month of the football season. The result? Blowout numbers across the board.

The state hit a handle of $864.3 million — the third highest in its history (the state legalized in January 2023). Moreover, it grew 25 percent year over year. This toll brings the state’s yearly handle to $6 billion. We won’t think it’ll hit $10 billion this year, but it’ll come awfully close.

Elsewhere, the state had a huge number revenue-wise. It was $106 million in September, which was a 30 percent jump from 2023 in its own right. It’s only the second month this year that Ohio hit at least $100 million in profits (January was the other).

DraftKings is the leading sportsbook in the Buckeye State betting handle-wise (with $308.7 million), however, FanDuel leads the way in revenue ($39.1 million to DraftKings’ $37.5 million). There is a massive gap after them though. In third place is bet365 with $68 million in handle and another $7.6 million in revenue. Rounding the rest of the rankings are BetMGM, Fanatics, and Caesars. The state licenses 14 sportsbooks, but those six are consistently ahead of the pack.

We started the article talking about taxes so it bears bringing up once again. Thanks to that revenue hit, the state collected $21.3 million in taxes. The year before? It was only $9.8 million. The massive increase is due to the tax rate change we mentioned. It was doubled this year, which again makes Antani’s proposal so head-scratching. Why would lawmakers agree to give up $10 million in tax revenue for no real reason? We’ll keep you posted on what happens, but we expect things to stay as is.