Ohio Plans to Increase Sports Betting Tax by Double Amount
The Ohio Legislature struck a $191 billion budget agreement just before the close of the financial year last Friday. This deal entails raising the levy on sportsbooks from 10% to 20%.
This higher tax rate, championed by Republican Governor Mike DeWine, was one of many issues the State House and Senate needed to resolve before concluding the two-year budget negotiations.
A legislative conference committee unveiled details of the agreement on Friday afternoon, and it sailed through the state Senate with a 25-6 vote and the state House with a 67-30 vote. Although the new fiscal year commences on Saturday, it's anticipated that the new budget won't go into effect until early next week, allowing for the drafting of final language and delivery of the plan to DeWine.
According to state budget analysts, the higher rate could yield an extra $100 million to $135 million annually from taxes on sports betting. With a 20% rate, Ohio will join states such as Pennsylvania and Illinois in charging the same rate.
Future of Sportsbooks
Produce watchers project that the increased tax rate might curb the development of Ohio's sports betting industry.
In a 20% tax scenario in the current environment, it's not an overstatement to assume that Ohio will have no more than 10 mobile operators offering bets in 12-18 months, former state Rep. Dan Dodd opined on Twitter Friday. "The state will also lose over $10m in license fees (unless operators pay for their licenses themselves hoping to recruit a new operator)," he added.
Dodd predicted unintended consequences from the legislation.
"The irony in doubling the Ohio sports betting tax is several key legislators designed the license framework intentionally to break up the monopoly on gaming that casinos/racinos have," he tweeted. "With maybe two exceptions, the 20% rate will solidify, instead of weaken, the dominance of casinos/racinos."
Other Distinct Changes
The Ohio budget encompasses further adjustments to the state's sports betting regulations, like allowing regulators to prevent people who threaten "violence or harm" against athletes from participating in wagering.
The legislation also extends the group of establishments permitted to apply for sports gaming licenses to incorporate breweries, wineries, or distilleries with on-site bars or restaurants, as well as microbreweries.
Lawmakers concurred to enhance the membership and duties of the Joint Committee on Sports Gaming and rename it the Study Commission on the Future of Gaming in Ohio. The commission is required to suggest the future of the lottery, sports betting, and casinos in the state by June 30, 2024.
The agreement doesn't include provisions from the Senate-passed budget that would have required annual reports on sports gaming or limitations requested by DeWine regarding the usage of "free" or "risk-free" promotional credits.
Likewise, the final agreement omits a House-proposed enhancement allowing for more sports gaming facilities in counties with over 800,000 inhabitants.
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Source: www.casino.org
