Ohio online sports betting operators may see their taxes increase from 10% to 20% of gross revenue if Governor Mike DeWine signs the budget bill state lawmakers approved on June 30. The additional cost for operators may be passed along to Ohio sports bettors in the form of less valuable promo offers if sports betting operators do what they’ve done in other states when their expenses increase.
DeWine requested the tax increase in his executive budget. He passed the proposed Fiscal Year 2024-2025 requests along on Jan. 31 to the Ohio General Assembly. That body made amendments, then passed the approved $190 billion budget bill back to DeWine. The governor hasn’t yet signed the bill into law.
Operators were paying close attention to the proposed increase that ended up being one changed word on Page 2,759 of the 6,198-page bill.
“Ten” contained a strikethrough, and “twenty” appeared next to it for the new Ohio sportsbook tax rate, underlined like all of the amendments are throughout HB33.
HB33 sponsor, House Finance Committee Chairman Jay Edwards, R-Nelsonville, opined about the Ohio budget.
State Rep. Edwards said on Friday:
We have fought for our constituents and our priorities in this transformative state budget.
DeWine signed the budget – and, therefore, the sports betting tax increase – into law in the wee hours of the Fourth of July.
The governor’s office published an announcement about the budget signing at 2:56 a.m. on July 4.
DeWine held a press conference today.
It’s a budget that … is really an investment in the people of the state of Ohio.
Ohio Online Sports Betting Operators to Cut Costs?
From Jan. 1 through May 31, Ohio online sports betting operators generated nearly $500 million in taxable revenue, according to the regulator. The Ohio Casino Control Commission (OCCC) reported detailed information about 18 operators.
DraftKings Sportsbook was among the first sports betting operators to launch when Ohio’s marketplace went live on Jan. 1, 2023.
The Boston-based company (DraftKings 29,02 +3,94%) is also famous for cutting promotional spending when it feels an economic pinch.
For example, Alex Weldon reported for Bonus on Feb. 17:
The amount DraftKings spent on promotions for casino users in Connecticut dropped 84% in January. This follows an 11-month period during which the company often paid out more in casino bonuses than its entire gross revenue.
DraftKings CEO Jason Robins also told New York lawmakers on Jan. 31 that if they didn’t reduce the 51% tax rate on sportsbooks or legalize online casino gambling, the state’s sports bettors would see “worse odds.”
Also, on Jan. 31, FanDuel Group President Christian Genetski told New York lawmakers that FanDuel Sportsbook might have to cut promotional expenditures.
Lawmakers didn’t comply with their requests in 2023.
Ohio Sports Bettors Can’t Threaten Players
Another notable amendment to Ohio’s budget is the second paragraph here:
The general assembly finds that the exclusion or ejection of certain persons from casino facilities and from sports gaming is necessary to effectuate the intents and purposes of this chapter and Chapter 3775. of the Revised Code and to maintain strict and effective regulation of casino gaming and sports gaming.
The general assembly specifically finds that the exclusion from sports gaming of persons who threaten violence or harm against persons who are involved in sporting events, where the threat is related to sports gaming, is necessary to effectuate the intent of Chapter 3775. of the Revised Code and to protect the interests of this state.
Hopefully, there aren’t enough Ohioans threatening players that excluding them from betting will noticeably lower tax revenue.
Meanwhile, doubling the tax rate on operators may not double the tax income.
In other words, the retro state slogan reintroduced in May about Ohio being “the heart of it all” may not be what online gambling operators feel for the Buckeye State right now.