Ohio is now the second state to allocate a cut of revenue from mobile sports betting to funding youth sports activities.
When Governor Mike DeWine signed the Ohio online sports betting bill last December, he also created a sports gaming profit education fund.
Money in this fund comes from 98 percent of the tax proceeds from sports betting. The fund benefits students in interscholastic athletics and extracurricular activities from kindergarten through grade twelve.
An Ohio Legislative Service Commission analysis estimated that a 10 percent tax on net revenue from sports betting could bring in $7 million during the first half of 2023. They further estimated that $24 million could be added in the first fiscal year to the state’s treasury during that time.
The funding concept was promoted by PLAYS and advanced by the Aspen Institute, a national think tank of diverse leaders seeking to address some of the world’s critical issues.
PLAYS stands for Promoting Local and Youth Sports. The organization’s goal is to find new revenue streams for youth sports activities stemming from the COVID-19 pandemic.
The PLAY Sports Coalition (PLAYS), a partnership of many youth sports organization leaders, including Pop Warner and the National Council of Youth Sports, was a key lobbyist in the passage of the deal in Ohio. The coalition’s mission is to ensure that organizations have the resources and support systems to serve youth through sports.
Ohio Sports betting revenue addresses at-risk programs
The PLAYS website cites a 2021 study by the Aspen Institute showing that 60 percent of sports leaders expect to lose at least half of their expected revenue over the next year, jeopardizing its future viability.
Ohio legislators received written testimony from members of PLAYS. Additionally, the legislators heard from the Lindy Infante Foundation and America SCORES Cleveland speakers before passing the bill.
The bill calls for 50 percent of the profits going toward youth sports and extracurricular activities. Consequently, the Aspen Institute believes that more than $12 million could flow into sports programs in Ohio.
Ohio among states funding youth programs through sports betting
In April of 2021, New York became the first state to set aside revenue for youth sports from sports betting led by Assemblymember Monica Wallace of District 143.
New York’s program, operated by the Office of Children and Family Services, received one percent of tax revenue from mobile sports betting in the first year. Additionally, $5 million in subsequent years for youth sport non-profit programs.
The Aspen Institute believes that these youth sports programs in New York could see a $2.5 million budget in the first year to maintain and add opportunities for youth sports.
PLAYS is also working on passing similar legislation in Massachusetts, where legalizing sports betting is gaining support. Last summer, the Massachusetts House allocated 20 percent of the tax revenue from sports betting to a newly-created Youth Development and Achievement Fund. The fund will provide financial assistance for students seeking after-school educational programs and activities.
With more states considering similar rules on sports betting in the coming years, PLAYS and the Aspen Institute will likely continue lobbying to direct gambling revenues towards community sports programs.
Sports betting is now legal in more than 30 states, with 18 of them permitting online sports betting.