Ohio Governor Wants 20% Sports Betting Tax, Potential Promo Bonus Ban for Violators

Posted on: February 13, 2023, 07:01h. 

Last updated on: February 13, 2023, 02:12h.

Sports betting in Ohio has only been around for six weeks. However, that’s enough time for Gov. Mike DeWine to call for some major changes.

Ohio Gov. Mike DeWine, left, takes the oath of office at his inauguration last month at the Ohio Statehouse. DeWine has called for changes to the state’s sports betting law in his budget proposal, including an increase in the revenue tax to 20%. (Image: DeWineHustedOH/Twitter)

Among the items in his proposed two-year budget, the Republican governor wants the tax on sports betting revenues doubled to 20%, the Ohio Casino Control Commission (OCCC) to be able to bar anyone from betting who threatens athletes and to potentially take away the ability for sportsbooks to offer promotional credits if operators break the rules regarding them.

The Governor’s budget included a package of reforms to encourage a marketplace where the rules and the spirt of the law are better followed,” DeWine Press Secretary Dan Tierney told Casino.org.

Whether state lawmakers will agree with DeWine’s recommendations remains to be seen, but the governor’s proposals follow comments he made last month that sportsbooks “crossed the line” several times.

Bonus Ban Possible for Violating Sportsbooks 

Already, the OCCC has announced five violations by four operators. Caesars Sportsbook has already agreed to pay a $150,000 fine after state regulators found ads posted by a third-party affiliate did not include a conspicuous message to prevent problem gambling behaviors.

BetMGM and DraftKings also face fines of $150,000 each for similar violations, and DraftKings also faces a $350,000 fine after it mailed out promotional mailers to more than 2,000 Ohioans under the age of 21, the minimum age to bet in the state.

Penn Sports Interactive also faces a $250,000 fine after Barstool Sports personalities promoted Barstool Sportsbook during a college football show held at the University of Toledo in November.

In his budget proposal, DeWine wants to ensure that any “free or risk-free” credits sportsbooks offer do not require bettors to make a deposit or risk their funds in order to use or withdraw winnings. Operators violating that would be subject to penalties from the OCCC, including a possible ban on offering promotional credits or bonuses.

 Cutting Off Bettors Who Make Threats

But it’s not just sportsbook behavior that has raised concerns. Shortly after sports betting became legal in Ohio, University of Dayton men’s basketball coach Anthony Grant commented that sports bettors targeted his players after a Flyers loss.

That led to OCCC Executive Director Matt Schuler speaking out about it during the commission’s January meeting. He called for commissioners to consider barring individuals from betting on sports in the state if they threaten athletes.

In response, DeWine’s budget proposal would allow the sports betting exclusion list to “include any person who threatens violence or harm against any person who is involved in a sporting event, where the threat is related to sports gaming.”

 Odds Likely Against Tax Hike

Of the proposed changes DeWine has inserted, the 20% tax rate seems least likely to stick. That would seem counter to what lawmakers wanted when they legalized sports betting in late 2021. Legislators pushed the 10% tax rate and also said they wanted to get as many businesses involved in sports betting as possible.

Ohio is the fourth largest state to offer sports betting, and the three states ahead of it – New York, Pennsylvania, and Illinois – have higher tax rates (although New York only taxes retail sportsbooks at 10%).

The higher tax rate also seems, on the face of it, to potentially punish the wrong players. The four sportsbooks cited by the OCCC are considered on the upper end of the sports betting market and more likely to bear the impact of the higher tax rate. However, Ohio has also licensed several smaller operators, and none of those have been cited by the OCCC for violations. Those operators, who will likely hold a smaller share of the revenue, would be the ones most affected by doubling the tax rate.

The OCCC will release January sports betting revenue figures at the end of this month.

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Source: casino.org

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