If Governor Mike DeWine’s proposed budget plan passes, legalized sports betting operators in Ohio could face a 40% tax rate.
The $218 billion Buckeye State budget plan focuses primarily on children’s health, safety, and education. DeWine wants to use the potential increase in tax revenue for sports infrastructure projects and youth education projects.
The 2025-2026 budget outlines suggest that the increase in the tax rate would generate between $130 and $180 million for the State, per Dispatch reports.
DeWine dubbed sports betting companies “extremely aggressive” in his press conference. He added, “It seems to be only just and fair that some stadiums be paid for by them, and it looks also fair that our young people, whom you know they are targeting, will get some benefit by being able to play sports.
This is not the first time the Governor has proposed an uplift in sports betting taxation. In 2023, Ohio’s budget bill doubled the tax rate from 10% to 20% just six months after the state officially launched legalized sports betting.
With the 10% tax rate, initial projections were that the State of Ohio would take approximately $35 million in tax receipts per annum.
Two of the state’s major sporting franchises, the Cincinnati Bengals and the Cleveland Browns, are undergoing major infrastructure projects.
The Bengals announced plans last year to invest up to $200 million in upgrades at Paycor Stadium, their home for 25 years.
The Browns are set to build a domed stadium in Brook Park, with projected costs at $2.4 billion. The NFL franchise’s ownership group, the Haslams, said in a statement, “Without a dome, we will not attract the type of large-scale events and year-round activity to justify the magnitude of this public-private partnership.
The Haslams added, “The transformative economic opportunities created by a dome far outweigh what a renovated stadium could produce with around 10 events per year.”
The plan must be approved by 30 June 2025, when the House and Senate release budget plans.
Sports Betting Tax Pressures Mount
Ohio joins Maryland, where Gov. Wes Moore has proposed doubling the online sports betting tax rate from 15% to 30%. In his proposals, Moore also suggests raising the table game tax rate to the same percentage from a starting point of 20%.
Last year, Illinois Gov. J.B. Pritzker implemented an adjustable sports wagering tax model. Operators generating over $200 million in revenue are taxed at 40%, while those below pay a 20% tax rate.
The State of New York boasts a 51% tax rate on online sports betting, the highest of any state generating notable sports betting revenue. Rhode Island and New Hampshire both also have a tax rate of 51% enshrined in the legislature. However, New Hampshire’s laws have caveats that mean DraftKings, the sole operator, effectively pays a lower effective tax rate.
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