Ohio Senator Wants Sports Betting Tax Cut after Hike Six Months Ago

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Ohio State Senator Niraj Antani has introduced a new bill, SB 190, aiming to slash the tax rate on Ohio sports betting operations.

The proposal comes months after lawmakers passed a bill that increased the tax rate from its original 10% to 20%. That decision was supported by Governor Mike DeWine, who signed sports betting into law in 2022 before it launched on January 1, 2023.

DeWine cited high rates of advertising and multiple regulatory actions against sports betting operators as the rationale for the higher tax rate. Operators, including BetMGM, Caesars, and DraftKings, have faced fines for alleged violations related to responsible gambling messaging.

Since the launch of online and retail sportsbooks in Ohio, more than $5.2 billion has been wagered by bettors. In August alone, Ohioans amassed a total handle of $380 million.

As of now, the state has collected more than $89.5 million in taxes from sports betting.

Proposal to Revert to Original Tax Rate

Senator Antani’s Bill 190 challenges the change in the tax rate, proposing its reduction back to the initial 10%.

Antani argues that the increased tax rate could continue to adversely affect the nascent sports betting market in Ohio. He expresses concerns that higher taxes might lead to less favorable odds for bettors, reduced promotions and incentives for customers, and spur the potential exit of sports betting operators from the state due to lower profit margins.

State gambling regulator the Ohio Casino Control Commission was recently forced to impose a deadline on 15 businesses who have yet to finalize launching despite being granted a license.

That includes sports teams the Cleveland Cavaliers, Columbus Crew, and the Cincinnati Reds, all of whom obtained licenses for retail ‘books which are yet to open. Online operators Bally’s and BetRivers have also secured retail licenses without yet taking advantage.

Lawmakers in favor of lowering the tax back to the 10% rate could easily pin these delays on the uncertainty over tax rates.

However, lawmakers who support the tax point to the increased revenues so far in 2023 as reason enough to uphold the change. There’s also the fact that since the tax changed, two more sportsbooks have launched in the state – and two others have relaunched.

Fanatics joined the market in August, including launching two retail sportsbooks, and the long-awaited ESPN Bet opened in mid-November. Bally Bet also relaunched in the state after going offline for several months to upgrade its service, during which time the tax rate changed.

Additionally, lawmakers have pointed out that some sportsbooks have played loose with existing rules.

DraftKings was fined for emailing promotions to individuals under 21, and Penn Entertainment’s Barstool Sportsbook (now relaunched as ESPN Bet) faced penalties for promoting sports betting registrations at a college event.

Lawmakers Concerned

The outcome of Bill 190 and the ensuing decision on the tax rate for sports betting in Ohio will be closely watched, as it could set a precedent for how states approach taxation in this rapidly growing industry.

Across legal U.S. sports betting markets, tax structures vary wildly. Iowa sports betting operators have the lowest tax bill at 6.75%, all the way up to the unique market of Rhode Island sports betting at 51%. The average is between 10% and 15%.

Outside of tax debates, 2023 Ohio sports betting has been at the center of another controversy.

The BetMGM sportsbook at The Great American Ballpark in Cincinnati (now relocated) was the chosen sportsbook for an attempted $100,000 bet by a minor league baseball coach who had received inside information from Alabama college baseball coach Brad Bohannon. Both coaches were subsequently fired, and Ohio briefly banned betting on baseball after the incident.

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