Ohio Governor Proposes Doubling Sports Betting Tax to 40%

Ohio Governor Mike DeWine has proposed doubling the state’s sports betting tax rate from 20% to 40%.

The increase could generate up to $130 million annually, funding professional sports facilities and youth sports programs.

While state officials support the plan, major sportsbook operators warn of potential cutbacks in marketing, sponsorships, and promotions.

Learn how this tax hike could reshape Ohio’s sports betting landscape and influence industry-wide regulatory trends in the U.S.

Ohio Governor Proposes Doubling Sports Betting Tax to 40%

3 Key Points:

1. Ohio’s Proposed Tax Increase: The sports betting tax rate would rise from 20% to 40%, doubling for the second time since the market launched in 2023.
2. Revenue Allocation for Sports Facilities: Funds from the tax hike would be used to support stadium projects and youth sports programs across the state.
3. Pushback from Sportsbook Operators: Industry leaders warn that higher taxes could force cost-cutting measures, affecting marketing, sponsorships, and player promotions.

Ohio Governor Mike DeWine has proposed another tax increase on sports betting operators, suggesting a jump from 20% to 40% in the state’s 2026-27 budget.

This move comes just two years after Ohio doubled its initial 10% tax rate as part of its 2023 budget revisions. If approved, the tax hike could generate between $100 million and $130 million annually, with proceeds directed toward a new fund supporting professional sports venues and youth athletics.

Under the proposal, a committee appointed by the governor and state legislature would oversee how the funds are distributed among sports infrastructure projects.

Governor DeWine Criticizes Sportsbooks for Aggressive Advertising

Governor DeWine defended the proposed tax increase, criticizing the marketing intensity of sports betting operators:

“These sports gaming groups are extremely aggressive. They’re in your face all the time, pushing Ohioans to gamble large sums of money,” DeWine told the Ohio Capital Journal.

He argued that sportsbook operators should contribute more to stadium funding, as they directly profit from the popularity of Ohio’s sports culture.

Industry Pushback: Operators Warn of Consequences

Ohio is home to leading U.S. sportsbooks, including FanDuel, DraftKings, BetMGM, and Fanatics, all part of the Sports Betting Alliance (SBA).

SBA President Jeremy Kudon warned that increasing the tax rate could force sportsbooks to reduce marketing budgets and promotional offers:

“Once a legal operator pays more than 20% in taxes—especially with additional market access fees—they have no choice but to cut other costs,” Kudon said.

He pointed to New York’s 51% tax rate, where only dominant brands like FanDuel and DraftKings have managed to maintain profitability, while smaller operators struggle to compete.

A Growing Trend: U.S. States Eye Higher Sports Betting Taxes

Ohio is not the only state considering tax hikes on sports betting revenue:

• Maryland Governor Wes Moore recently proposed doubling Maryland’s sports betting tax from 15% to 30% in his FY 2026 budget.
• New York and Pennsylvania already impose higher-than-average tax rates on sports wagering, which has impacted smaller operators’ ability to compete.
• Analysts predict that states facing budget deficits and growing gambling addiction concerns will continue increasing sportsbook tax rates.

According to JMP Securities, these tax hikes will likely benefit larger sportsbooks with established market share, deep pockets, and national brand recognition, while challenger brands may struggle.

“At the end of the day, online gaming companies will adjust their business models, shifting investment in marketing and promotions to offset rising taxes,” analysts wrote.

Ohio’s Sports Betting Industry Faces a Critical Crossroad

Ohio’s proposed sports betting tax increase is set to spark a heated debate among lawmakers, sportsbooks, and industry stakeholders.

While the state seeks additional revenue for sports infrastructure, operators warn of potential cutbacks, which could reduce promotional offers and affect market competitiveness.

As other states consider similar tax hikes, Ohio’s decision could set a precedent for how U.S. gambling markets navigate financial pressures and industry growth.