New Ohio Sports Betting Tax Plan Could Reshape the Industry Forever

Yet another new Ohio sports betting tax plan is on the table, and if it’s ed it will have ramifications extending far beyond The Buckeye State. 

Indeed, it will change the legal sports betting industry at large forever.

Senator Louis Blessing is the primary sponsor behind Senate Bill 199 (SB 199), which seeks to tax the Ohio sports betting handle rather than simply assess a tax rate to sportsbook profits. 

For those who may not know, the “handle" refers to the total amount of money bet on sports. It is always the higher number when looking at reports for sports betting in Ohio.

Let’s use the start of this year as an example. In January 2025, The Buckeye State took in over $1 billion of total bets. However, once you factor out winning wagers, sportsbooks made a little more than $80 million for the month. Under the current model for Ohio sports betting—and every other state—the second number is the one that’s taxed. 

That is what makes Senator Blessing’s proposal so unique, not to mention groundbreaking. It could redefine how policymakers look to capitalize on the growing popularity of sports betting in the United States.

The Financial Impact of the New Ohio Sports Betting Tax Bill Could be Massive

At first glance, this is a measure Ohio online sportsbooks would almost assuredly push back against. And, well, they probably will. But Blessing’s measure isn’t looking to tax the handle at a monumental clip. Instead, it calls for a 2 percent tax on the overall betting volume. 

This number is ostensibly small. In reality, though, it could be quite large.

Consider last year’s Ohio sports betting handle. From January 2024 through December 2024, The Buckeye State took in nearly $7.9 billion in total bets. Under Senator Blessing’s bill, Ohio would be entitled to 2 percent of that after subtracting taxes already paid. During this same span, sportsbooks paid almost $170 million in taxes. Remove that from the handle, and the state is still left with $7.7 billion in handle that can be taxed.

Two percent of that number comes out to…$154 million. That is nearly as much as sportsbooks paid in taxes for the entire year! So, you can understand why Ohio lawmakers would be interested in traveling this direction.

The Buckeye States Continues to Explore Ways of Making More Off Sports Betting

While the latest Ohio sports betting plan is virtually unprecedented, its existence keeps with a recurring theme. The Buckeye State is clearly looking to make more off its sports betting operations. As Pat Evans of Legal Sports Report writes, this latest attempt comes after a previously failed one:

“SB 199 comes after lawmakers rejected Gov. Mike DeWine’s proposal to double the tax rate on sports betting revenue for the second time in two years. In 2023, DeWine doubled the tax rate to 20 percent from 10 percent, just months after the market launched. A study by lawmakers last year concluded that the increase might have been premature. Lawmakers rejected his proposal this year to increase it to 40 percent, which could have netted the state an additional $180 million annually.” 

Although many believe Governor DeWine jumped the shark (twice), his approach isn’t atypical. More and more states are seeking to raise sports betting taxes shortly after launching services. 

Barely a year after sports betting in Kentucky rolled out, select policymakers this year attempted to raise the state’s sports betting tax. The initiative failed. The same goes for sports betting in West Virginia. But that isn’t stopping other states. The Illinois sports betting market has on multiple occasions explored tax hikes. Lawmakers are expected to look at raising tax rates for sports betting in Kansas during the near future as well.

Still, a proposed handle tax is fairly novel. Regulators overseeing online sports betting in Tennessee implemented something similar once upon a time, but that was in lue of the overall revenue tax.  

Will Ohio Approve This Latest Sports Betting Tax Hike?

It remains much too early for us to answer this question. SB 199 didn’t land until mid-May. Not enough is known about the extent of its .

Conventional wisdom suggests it has plenty. Otherwise, why bring it to the table so late into legislative sessions? On the flip side, if Governor DeWine’s proposal was rebuked, what makes this any different? The percentage is smaller (2 percent versus a 20 percent increase), but the overall money at stake ($150 million versus $180 million) isn’t all that different.

Regardless of the among lawmakers, we can expect sports betting sites in Ohio to aggressively push back against its approval. It isn’t necessarily about the 2 percent handle tax itself. Make no mistake, that’s part of it. But it’s more about the precedent. 

If the Ohio sports betting tax model follows this route, it is only a matter of time before other markets attempt to follow suit. That, in turn, will cost operators a pretty penny. Especially when it comes to glamour markets. Imagine, for instance, a New York sports betting handle tax. At 2 percent of their 2024 handle, which came in at over $22.7 billion, we are talking about an additional $450 million in fees for sportsbooks. And that’s just one year. 

This is a Landmark Moment for Sports Betting in the USA

Proponents of this model will point out that sports betting sites can afford it. That’s not wrong. It’s also not the point. Sportsbooks are in the business of optimizing their profits. A handle tax, on top of a revenue tax, runs counter to that mission. 

To that end, this could be a landmark moment for the industry. If the new Ohio sports betting tax plan becomes a reality, it’ll open the door for other markets to follow the same script. And the sports betting industry, as a result, will never be the same.

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