Defeat of Ohio's Suggested Tax Increase for Sports Betting Companies
Freshened-Up Article:
Sports Betting Taxes in Ohio: A Closer Look
A Quick Twist on the Stakes
In the heartland of America, the Buckeye State is seeing some shuffling when it comes to taxing sports betting. Ever curious about the ins and outs of the US online casino industry? Look no further than Michael Savio, providing you with a unique perspective you won't find elsewhere. As a long-time observer of the retail industry, even during his Las Vegas days, and now delving deep into the online world, Michael keeps you in the loop with online casino reviews and the latest industry news. Catch up on Michael's latest insights at casinos.com!
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Recent Developments and Discussions
The Unsettled Tax Rate landscape
Today, the sports betting tax rate for operators in Ohio sits at 20% of gross gaming revenue, a number that bumped up from 10% in July 2023. Both online and brick-and-mortar sportsbooks fall under this tax, which, let's face it, isn't the smallest amount they're rolling in.
Upcoming Changes?
Some lawmakers have raised the idea of additional taxes, including a 2% privilege fee on total sports betting handle, a proposal put forth in Senate Bill 199 – if passed, making Ohio only the second state to enact such a tax (following Tennessee). Other proposed changes, such as Governor Mike DeWine's proposal to double the tax rate to 40%, have yet to be approved.
The Tax Chronicles
- Earlier this century: Operators were taxed at 10% (Jan–July 2023).
- A major jump: The tax hike to 20% took effect in July 2023.
Timeline:
- December 8, 2021: Legalization signed into law.
- January 1, 2023: Betting available for those 21+ with the initial tax rate of 10%.
- July 2023: The tax rate climbed to 20%.
Proposals That Missed the Cut
- Governor DeWine's proposal to double the tax rate to 40% did not make it into the final budget in early 2025.
- Discussions around progressive tax structures (e.g., 25% on $30–50 million, 30% on $50–100 million, up to 40% on amounts over $200 million), while interesting, are not currently law.
At a Glance Summary
| Category | Rate/Structure | Status ||-------------------|------------------------------|----------------------|| Gross Revenue Tax | 20% | Current (since 2023) || Handle Tax (SB 199)| 2% (proposed) | Under consideration || Previous Rate | 10% (Jan–July 2023) | Historical || Proposed Increase | 40% (revenue), 2% (handle) | Not enacted/Proposed |
A Few More Tidbits
- Federal Obligations: In addition, there's a federal excise tax of 0.25% on sports betting handle across all states with legalized sports betting[4].
- The Competitive Market: Ohio’s 20% tax rate is competitive, with some states considering or implementing higher rates, such as North Carolina aiming for 36%[1].
The current and historical tax rates in Ohio reflect a balancing act between generating state revenue and keeping the sports betting market competitive for operators.
- Michael Savio, an expert in the online casino industry, has shared insights about sports betting taxes in Ohio, which recently saw a bump from 10% to 20% of gross gaming revenue for both online and brick-and-mortar sportsbooks.
- In the ongoing discussions, lawmakers have proposed additional taxes, such as a 2% privilege fee on total sports betting handle in Senate Bill 199, a move that could make Ohio the second state to enact such a tax, following Tennessee.
- Ohio's sports betting tax landscape stands as a balance between state revenue generation and keeping the market competitive, with other states like North Carolina considering higher rates at 36%.
