Ohio Proposes Major Tax Hike on Sports Betting
Ohio lawmakers on February 4 are revisiting the issue of sports betting taxes, proposing a significant increase as the state continues to see rapid growth in its sports gambling market. Governor Mike DeWine has introduced a bold proposal for the 2026-2027 budget, aiming to raise the sports betting tax rate from 20% to 40%. This potential hike, if passed, could generate up to $130 million in revenue for the state, which DeWine envisions funneling into sports facilities across Ohio.
DeWine’s proposal comes on the heels of a tax increase in 2023, when the state doubled its sports betting tax rate. However, the governor argues that another increase is justified given the explosive growth of the sports betting industry. According to DeWine, sportsbooks have been aggressively marketing their products to Ohioans, using bold and in-your-face tactics that have led to significant financial losses for local bettors. The governor believes it is “only just and fair” that the revenue generated from these losses should be used to fund the state’s sports infrastructure, such as the renovation and construction of stadiums.
The proposed tax hike would direct the generated funds to a designated group appointed by the governor and the legislature. This money would help maintain and improve sports venues throughout the state, ensuring that they are able to host major events and continue supporting Ohio’s economy.
However, the proposal has met resistance from some corners of the sports betting industry. Operators have expressed concern that an additional tax burden could harm their businesses. Jeremy Kudon, president of the Sports Betting Alliance (SBA), voiced his opposition to the proposal, emphasizing the negative impact higher taxes could have on operators. He pointed out that when licensed operators are required to pay over 20% of their gross gaming revenue (GGR) in taxes, particularly when combined with market access fees, it forces them to cut other costs. This could result in layoffs or a reduction in sponsorship opportunities, which in turn could deprive sports organizations of valuable deals.
Kudon also warned that an increase in taxes could drive more bettors toward the unregulated, illegal market, which typically operates with lower taxes or none at all. The ability of legal operators to compete against illegal bookmakers could be further compromised if taxes continue to rise, potentially undermining the state’s efforts to regulate and control sports betting.
Ohio is not alone in considering tax hikes for sports betting. Other states have also been evaluating or implementing higher taxes, citing similar concerns about the industry’s rapid expansion. For example, both New York and Pennsylvania impose some of the highest taxes on sports betting operators in the U.S., making their markets challenging to navigate for businesses. In Maryland, Governor Wes Moore has proposed a measure to increase the sports betting tax rate to 30%, in line with DeWine’s push for higher taxes in Ohio.
While many states are actively considering or imposing higher taxes, not all markets are following the same path. Michigan, for example, narrowly avoided a tax increase earlier this year when a proposal for a modest tax hike was defeated. This demonstrates that, despite pressure from some lawmakers, the issue of sports betting taxation is far from settled, with different states taking varying approaches based on their unique economic circumstances and priorities.
Internationally, the conversation surrounding sports betting taxes is also gaining traction. France, for instance, approved tax hikes across several industries, including gambling, as part of a broader strategy to raise revenue for public services. Similarly, the UK is in the process of discussing a statutory levy that would require operators to fund gambling research, education, and treatment programs.
As the debate continues to unfold in Ohio, sports betting operators, lawmakers, and the public will be watching closely to see how the proposed tax hike develops. Whether the higher tax rate ultimately passes or not, the conversation is likely to remain a focal point in the ongoing evolution of the sports betting industry in Ohio and beyond. With tax rates varying significantly from state to state, the landscape for sports betting in the U.S. remains complex, and the pressure on operators to balance profitability with regulatory compliance is only set to increase.