Ohio Governor Looks To Raise Taxes On Sports Betting

By
Billy Costigan
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Governor Mike DeWine’s proposal to raise Ohio’s sports betting tax rate to 40% is being pitched as a revenue-boosting masterstroke—but it could very well end up being a self-inflicted wound on a young and still-developing industry. The plan, which would quadruple the original tax rate in just two years, is drawing sharp criticism from betting operators, analysts, and industry watchdogs—and for good reason.

Ohio only entered the sports betting arena in January 2023, following the passage of House Bill 29 in December 2021. The rollout was well-timed and robust, attracting major players like FanDuel, DraftKings, BetMGM, and Fanatics. The original tax rate of 10% was seen as a competitive invitation to investment.

But the honeymoon was short. By July 2023, the rate doubled to 20%, and now—less than a year later—Governor DeWine wants to double it again, up to 40%, which would make Ohio home to the second-highest sports betting tax in the country, just behind New York’s 51%.

DeWine’s rationale is rooted in state development: he wants to funnel the projected $180 million in annual revenue toward building youth sports academies and upgrading public stadiums. His argument rests on the idea that sportsbooks are pulling in huge profits and should therefore give back more to the public.

But his critics say he’s playing with fire.

Scott Ward, vice president of the Sports Betting Alliance, called it what it is: an aggressive tax blitz that may have unintended consequences. As Ward pointed out:

“Upstanding American businesses shouldn’t have to fear government arbitrarily raising their taxes by exorbitant amounts. But that’s exactly what Ohio sports betting consumers are facing.”

There’s concern that such a tax hike could:

  • Scare off sportsbook operators, who may begin to reassess their presence in Ohio.

  • Raise betting prices, meaning worse odds and fewer promotions for customers.

  • Push users to illegal offshore platforms offering better returns.

Supporters of the tax increase often point to New York’s 51% tax rate as proof that high taxes can coexist with a thriving market. But the comparison doesn’t hold:

  • New York has twice the population of Ohio.

  • It boasts a deeply embedded sports culture with massive metropolitan demand.

  • It has the volume to offset the tax burden.

Ohio? It’s growing—but it’s not there yet. A 40% tax might be sustainable in a juggernaut like New York, but in a mid-tier market still in its infancy, it could be the economic equivalent of slamming the brakes mid-acceleration.

There are currently 16 sportsbooks licensed in Ohio. If the tax increase passes, many of them may:

  • Scale back operations or exit the market altogether.

  • Slash marketing budgets, pulling back on the promotional ecosystem that currently benefits users.

  • Reduce innovation, limiting technological growth and customer experience improvements.

All of this could ultimately hurt bettors, not help them. And let’s not forget—Ohio legalized sports betting not just to fund public programs, but also to create a competitive, regulated environment that would undercut illegal markets. A 40% tax could push bettors right back into those gray zones.

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