Ohio Gov. Mike DeWine has proposed increasing the state’s sports betting tax rate to 40%, potentially marking the second increase in two years. The proposal, rolled out on Monday, is a signature part of his final budget plan for fiscal years 2026-27.
If approved, DeWine’s plan would generate an estimated $130 million to $180 million annually in new tax revenue to help fund a new Sports Facilities Construction and Sports Education Fund. Spending would be overseen by a group appointed by the governor and state legislature, with a large portion allocated to finance a new stadium for the NFL’s Cleveland Browns. Traditionally, funding has come from the state’s general fund, which are taxpayer dollars.
Legal sports betting launched in Ohio in January 2023, in time for the college and NFL playoffs. The initial tax rate on sportsbook revenue was 10%. However, that July, DeWine successfully doubled the rate to 20%. Another hike would make Ohio the second-most expensive market for betting operators in the U.S., behind only New York (51%).
“This budget creates a permanent solution for requests of the state to help fund these stadiums. It does so without general fund dollars,” DeWine said via the Cincinnati Business Courier.
“Ohio citizens are giving, every single day, millions of dollars to the sports gaming companies. It’s time for us to help raise the tax on them so that we can do things to help Ohioans. It seems to me like a very logical approach.”
Ohio is home to more than a dozen legal online sportsbooks, including DraftKings, FanDuel, BetMGM, Caesars, and Fanatics. With also several retail locations, the state has built one of the largest presences in the betting industry.
DeWine’s proposal has drawn plenty of opposition, with skeptics fearing that higher tax rates will hurt business efforts. There are also concerns about a rise in unregulated betting practices. Scott Ward, vice president of the Sports Betting Alliance, said via iGaming Business that the plan would “amount to a 400% tax increase over a two-year period.”
Several other states have explored similar tax proposals for betting. Midwestern neighbor Illinois has been among the most aggressive, with Gov. J.B. Pritzker proposing an increase from 15% to 35%. But lawmakers ultimately went a step further, installing a scale of 20% to 40% based on revenue.
Meanwhile, in Maryland, Gov. Wes Moore recently proposed a tax hike from 15% to 30%.
Sports betting has been a hit since opening its doors in Ohio. Residents wagered $8.8 billion on sports in 2024, an increase of $1.2 billion from the previous year. Lifetime revenue is now above $1.8 billion. Similar states include Virginia ($2.01 billion), Arizona ($1.77 billion) and Indiana ($1.76 billion).
Doug Bonjour
