Ohio Legislature Passes HB 515 to Update Sports Betting Tax Structure

Ohio sports betting operators received good news last month thanks to a change in the way the state is handling its tax calculation structure.

On June 1, Ohio lawmakers adjusted how they tax sports betting operators. This change comes in preparation for Ohio's online sports betting launch on Jan. 1, 2023. This will benefit the sportsbooks as well as the bettors — all parties will save a little money thanks to the state's legislative efforts.

Ohio Sports Betting Tax Structure Updates in Detail

Rather than taxing operators daily through HB 29, the new HB 515 will regulate taxpaying to be done every month instead of paying taxes on days that banks are open, which is in line with how sportsbooks in other states pay their taxes.

If sportsbooks were taxed daily their effective tax rate would increase over time depending on their earnings each day. Revenue from the NBA Finals, Super Bowl, or March Madness would lead sportsbooks to pay a much higher rate because bettors tend to bet the most during these popular annual events. Sportsbooks would have to pay taxes for a 24-hour gaming window from Tuesday-Friday and a 72-hour window from Saturday-Monday under the old structure.

Simply put, the more wagers placed during an event, the the higher average tax rate for sportsbooks would be. Making a profit through promotions would have also been affected since many bets are placed with incentives and ahead of time.

If state lawmakers hadn’t implemented a new bill on the tax structure, some sportsbooks may have been steered away from entering the Ohio market. Ohio is projected to have one of the largest sports betting markets in the North America when the state launches next year. They already have BetMGM, betJACK, DraftKings and PointsBet in the fold with more operators expected to be announced soon.

Keep in mind that this new structural update will not apply to casinos in Ohio. State casinos still have to physically report their earnings to banks between Monday-Friday while online gaming operators will have to submit their earnings on the 15th day of each month.