An Ohio lawmaker Wednesday filed another bill that would levy a second state tax on sports betting operators.
Sen. Louis Blessing’s SB 199 would tax sports betting handle at 2% in addition to the current 20% tax on adjusted gaming revenue (AGR). If it passes, Ohio would be the only legal wagering state in the U.S. to tax both — and just the second to have a tax on handle at all.
The bill would allow for the 0.25% federal excise tax on handle to be written off.
According to the text of the bill, the new tax would be earmarked to fund renovations for publicly owned athletics facilities and to support interscholastic athletics and other extracurricular activities for public school students.
The proposal is the second this year in Ohio that seeks to raise the cost of doing business for gambling companies.
Gov. Mike DeWine earlier this year pitched doubling the tax rate from 20% to 40% in his proposed budget. Lawmakers removed the proposal. When sports betting went live in Ohio on Jan. 1, 2023, the tax rate was 10%. Within six months, DeWine pushed through an increase to 20%.
Public sports venues would get facelifts
Three new funds would be created by SB 199, and all tax dollars would initially be sent to a Sports Gaming Privilege Fee Fund. State expenses would be deducted, then 98% of the remaining funds would be sent to a facility renovation fund and 2% would be earmarked for an interscholastic athletics fund.
Qualified facilities would include those used as home sites by any of the state’s professional or minor-league teams, notably publicly owned venues for all four major professional sports teams plus Major League Soccer, the National Women’s Soccer League, and the WNBA. In addition, a host of professional women’s sports leagues are named in the legislation, including three football leagues, a baseball league, and a hockey league.
Taxes on wagering handle are uncommon. Seven years after the Professional and Amateur Sports Protection Action (PASPA) was overturned, 40 U.S. jurisdictions offer some form of legal sports betting, but only Tennessee taxes operators on handle.
When operators launched in Tennessee in November 2020, operators were taxed at 20% of adjusted gross revenue. In July 2023, a 1.85% tax on handle was implemented and netted the state just over $4 million more in tax revenue than the tax on AGR.
