There’s an old saying that goes, “Laws are like sausages. It’s better not to see them being made.”
Lawmakers in Columbus apparently couldn’t wait six months before grinding the Ohio sports betting law into small particles, mixing it with non-meat ingredients and stuffing it into a sub mucosa of an animal intestine.
OK, that sounds kind of gross (that’s why we prefer not to watch). But lawmakers are currently debating Ohio’s sports betting tax rate and certain aspects of where revenue will be distributed. HB 29 was passed just 18 months ago, and Ohio hasn’t hit the six-month mark on legal sports betting in the state.
Still, with a June 30 deadline to change the rules for fiscal year 2023-24, lawmakers are in prime butchering mode, slicing and chopping to their delight. Here’s where important issues like Ohio’s sports betting tax rate and the fate of the law’s dedicated youth funding stand.
Will the Ohio House OK the governor’s sports betting tax hike?
It was actually only six weeks into Ohio’s legal sports betting life when Gov. Mike DeWine in February proposed doubling the sports betting tax rate from 10% to 20%.
The tax is levied on revenue from online sportsbooks and the casinos, racinos and professional sports teams partnered on retail sportsbook in the state.
Through April, Ohio has taken over $44 million in tax revenue from Ohio sportsbooks. It’s easy to see why they’d like to double it.
Some in Columbus, including the main architects of HB 29, are not keen on the tax increase. State Rep. Bill Seitz, one of the law’s sponsors, said in February:
“I do not agree with this idea. A low tax rate encourages legal play through regulated entities, which we prefer compared to illegal bookmaking outfits. Moreover, the betting has only been legal for a little over a month. So we don’t even know what kind of money the regulated entities are making.”
Ohio’s 10% tax rate is on the lower end of U.S. states that have legal sports betting, but it is not an outlier in that regard. Outside of the Northeast, where New York levies a 51% tax rate on online sportsbooks and 50% on retail, Ohio is in line with other markets. Tennessee is the only non-Northeast state that stands out, with a 20% tax rate.
Still, there is a push in New York to lower the state’s high tax rate, with sportsbooks arguing that it hinders their path to profitability.
Youth sports funding on the statehouse butcher block
The tax rate isn’t the only issue being debated in Columbus. Lawmakers are also trying to tweak how sports betting revenue is spent, with an initial plan to fund youth sports on the chopping block.
Most revenue from Ohio sports betting — 98% — goes into the Sports Gaming Revenue Fund. The other 2% goes to problem gambling educational initiatives.
Instead of funding youth sports, the budget proposal passed by the Senate this week would go to Ohio schools through the state’s school-funding formula. It would also cap the amount of revenue going to schools at $15 million.
Seitz, again, is not on board, telling WCPO Cincinnati this week:
“We intend to fight the Senate on this issue. To my dismay, the Senate has chosen to eviscerate the original sports gaming bill in this regard by appropriating not a farthing for sports and extracurricular activities, but rather, putting it all in school funding.”
Clock ticking on Ohio budget
Ohio’s 2023-24 fiscal year begins July 1, so lawmakers have only one week to wrangle over any tweaks to Ohio’s sports betting law for the coming year.
It’s tough to tell how this is going to go. If DeWine started pushing for the tax hike less than two months into legal sports betting, he has probably been talking behind the scenes about it for much longer.
Seitz, a powerful Republican on five committees, is no pushover. As an architect of HB 29, Seitz has probably been in the butcher shop longer than DeWine. And as a state representative, Seitz is among the governing body that will decide whether the state senate’s budget is hacked up before final passage.
The Ohio House has sessions scheduled for June 27 and 28, and it can convene on June 29-30 if need be.
Until then, it may be best for the queasy to look away from the carnage.