The Buckeye State beat the buzzer, passing legislation to legalize sports wagering before the clock ran out on 2021.

A multi-year, deliberate process resulted in a bill that will promote a competitive market for sports betting – helping the industry grow and create jobs. The low 10% tax rate on bets, and very modest licensing fees, are the most critical pieces of the bill.

Ohio will also have a number of licenses available, and allow online sports betting. In the digital age, online sports betting is critical. The state that has had digital sports betting the longest is New Jersey, where online bets made up a whopping 90% of bets placed in November 2021.

Low taxes allow any businesses to better compete, keep prices low, and pay workers more. For sports wagering, tax rates are even more important because margins are narrow. High taxes add costs that cannot be passed on to customers without impacting the product itself: sports betting lines, payouts, bonuses, and alike.

High taxes, upwards of 15% rates and higher, discourage betting activity. This hurts the business. It also keeps bettors in the black market where shady outfits do not have to comply with regulations and tax law.

This means more money is being funneled to illegal outfits, and whoever may be behind them. Bettors can have trouble collecting their money from these groups as well, and be left with no recourse.

Black market betting is a huge negative from integrity as well. Legal sportsbooks monitor bets for activity that could indicate foul play is afoot, they report this activity to the authorities. Black market outfits do not. Further, for people who have issues with gambling, legal betting is a huge win as sportsbooks monitor their activity and can flag when there are signs of a problem.

Ohio’s legislation also avoided major regulatory pitfalls that can hamper the industry and slow progress – particularly not requiring official league data for live in-game bets. Such a rule is completely unnecessary for integrity, and only serves to insert government into business agreements between private companies.

Ohio got it right, learning from the good example set by their neighbors in Indiana, and also avoiding the bad example set by their neighbors in Pennsylvania, a state that still has one of the highest effective tax rates on sports betting at 36%.

As more states legalize and interstate competition heats up, it will become even more important for states that have started off with high taxes, bad regulations, and those who missed the boat on digital betting, to improve their policies.

Photo Credit:

Erik Drost

Dec. 8, 2019

Cleveland, OH


Photo Credit: Erik Drost – Flickr