Ohio considers sports betting handle tax under new senate proposal

Ohio lawmakers are weighing a new approach to sports betting taxation that would place a 2% levy on total betting handle, a move that could increase state revenue and set Ohio apart as only the second state in the U.S. to implement such a measure.

Senate Bill 199, introduced by Senator Louis Blessing, proposes applying the tax to the total amount wagered in the state, known as the handle, rather than to operator revenue.

Tennessee is currently the only state to tax handle rather than revenue. The bill also allows operators to deduct the federal 0.25% excise tax from their taxable amount but does not permit deductions for free bets or promotional play.

The proposed legislation follows a series of debates over sports betting taxation in Ohio. In 2023, just months after legal sports wagering went live in the state, Governor Mike DeWine pushed through a doubling of the tax rate on sports betting revenue from 10% to 20%.

At the time, a study by lawmakers suggested the increase may have been premature. Earlier this year, DeWine proposed another hike, this time to 40%, arguing it could generate an additional $180 million annually. However, the legislature rejected the proposal.

Senator Blessing’s new plan takes a different route. Rather than adjusting the rate on revenue, SB 199 targets the broader base of betting handle. He has framed the tax as a way to support publicly-owned sports facilities and interscholastic athletic programs. The revenue allocation echoes DeWine’s earlier goals, which also included funding stadium projects and youth sports initiatives.

Since launching legal sports betting in January 2023, Ohio sportsbooks have taken in $19.2 billion in wagers and generated $2.06 billion in revenue. This activity has produced $359 million in tax revenue for the state under the current system. Had the proposed 2% handle tax been in place since launch, it would have yielded approximately $383 million—$24 million more than the current structure.

The concept of taxing handle has been tested in other jurisdictions with mixed results. Tennessee transitioned from a 20% revenue tax to a 1.85% handle tax in 2023. Meanwhile, similar proposals in West Virginia and Kentucky were introduced but ultimately failed to gain legislative support.