Ohio to Double Sports Betting Tax Under New Legislative Budget - Newstbt.com
Just hours before the end of the Ohio fiscal year on Friday, the state’s general assembly agreed to a $191 billion budget deal. A notable part of the agreement included a twofold jump in the tax on sportsbooks, which went from 10% to 20%.
The newly approved budget in Ohio brings with it an increase in taxes on sports betting from 10% to 20%. This was the rate desired by the Republican governor, Mike DeWine, and is one of the many issues the state Assembly and Legislature had to agree on. Details of the agreement were released on Friday, and were accepted by a 25-6 vote in the state Senate and a 67-30 vote in the state House. The new budget will likely go into effect early next week, giving plenty of time for the legislation to make its way to DeWine’s desk. Analysts expect the higher tax rate to earn an extra $100 million to $135 million a year. The 20% tax rate brings Ohio in line with states like Pennsylvania and Illinois. This increase in taxation may lead to a reduction in the number of sportsbooks available.
Reduction in Sportsbooks
It is expected that the increased tax rate could slow down the growth of the sports betting industry in Ohio. Former state Representative Dan Dodd tweeted on Friday that, with the current situation and a 20% tax rate, it is likely that in the period between 12 and 18 months, there will be only ten or fewer mobile sports betting operators in Ohio. Additionally, the state will lose more than 10 million dollars through the license fees, unless the proprietors decide to pay for it. Dodd commented on this, saying that it contradicts the original intensions of the regulation which was to break the oligopoly of casinos and racinos. Consequently, the 20% tax rate will conversely increase the monopolization of these establishments. Additional changes are also expected.
Other Notable Changes
In the Ohio budget, additional modifications were made to state legislation governing sports betting, including prohibiting people who undertake “violence or harm” against sportspersons from taking part in gambling. The law also broadened the types of establishments which can apply for sports gaming licenses to comprise micro-breweries, breweries, wineries or distilleries with on-site restaurants or bars. Additionally, legislators consented to increasing the size and roles of the Joint Committee on Sports Gaming and renaming it the Study Commission on the Future of Gaming in Ohio. This commission is mandated to advocate the potential of lottery, sports betting and casinos in the state by June 30, 2024. The ultimate agreement does not feature the Senate-approved budget provision that would necessitate yearly reports on sports gaming, nor does it contain any restrictions requested by DeWine on the us of “free” or “risk-free” promotional credits.
The final deal did not include a House proposal that would have raised the limit of sports gaming facilities allowed in counties with a population of over 800,000.
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