There has been a lot of back and forth taking place in Ohio when it comes to their sportsbook tax. At the moment, the Sportsbook Tax in Ohio is a whopping 20%. However, an Ohio Bill wants to Reduce the Sportsbook Tax back to its original 10%.
The Ohio Bill to reduce the Sportsbook tax is SB 190 and was introduced by Senator Niraj Antani earlier this week. Furthermore, Antani presented the bill during the ongoing “lame-duck” legislative session in Ohio. In his testimony, Antani highlighted that Ohio ranks as the sixth highest taxed state among the 38 states that have legalized sports betting.
Antani expressed his desire for the state to adopt a tax rate of 6.75%, the lowest in the country, but acknowledged that a 10% rate remains a reasonable option.
Ohio Bill wants to Reduce the Sportsbook Tax to 10%
Ohio State Senator Niraj Antani, who is the sponsor of the bill, contends that the elevated tax rate is detrimental to the state’s sports betting market. He expressed concerns that the proposed doubling of the tax rate may deter operators from making further investments and could potentially dissuade new entrants into the market. Thus, it makes it very difficult for small bookies to compete against large sportsbooks.
His apprehensions resonate with those expressed by certain Republican members when Governor Mike DeWine announced his intention to increase the rate.
“This has stifled the growth that was taking place and has caused other companies to reconsider their plans to invest in Ohio.” According to a coalition of Republicans stated in their response to the proposed tax increase. “As future General Assemblies contemplate modifications to the sports gaming framework or the introduction of new gaming formats, it is essential to consider the interests of those who will be making the investments.”
Although the bill enjoys legislative support, its advocates must persuade both opponents and the public regarding the advantages of a reduced tax rate. Currently, the majority of the tax revenue generated by the industry is benefiting the state’s educational institutions. Thus, indicating that a reduction could result in a loss of funding for these schools.
Ohio Needs a Better Tax Rate to State Competitive with Neighboring States
His reasoning behind the Ohio Bill to Reduce the Sportsbook Tax rate is competition. He said that the states with the lowest tax rates in the nation are Iowa and Nevada. Their tax rates are three times lower than Ohio. Furthermore, he said that, “our neighboring states—Kentucky, Michigan, Indiana, and West Virginia—currently maintain significantly lower tax rates.” Therefore, it, the “situation places us at a considerable disadvantage both regionally and nationally.”
Furthermore, it creates substantial challenges for holders of B and C licenses in achieving financial viability. A tax rate of 10% was deemed reasonable, positioning us in the middle tier of tax rates, he stated. This is one of the reasons that opening a bookie business has not been seen favorably amongst gambling operators.
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