Increase in Taxes may Reduce Negative Impacts of Gambling in Ohio, According to Economic Experts
It's March 19, 2025, and March is not only Problem Gambling Awareness Month but also a time of discussion about the future of gambling in Ohio.
Gov. Mike DeWine, in his recent statements, has expressed a desire to double the state's tax on sports betting and increase taxes on casinos. The aim is to help fund professional sports stadiums and potentially lessen the negative impacts of gambling.
The proposal for higher taxes on casinos and sportsbooks has been echoed by a group of economists in Ohio. They argue that such a move could help reduce problem gambling, a concern that has been growing as the state's gaming industry continues to expand.
Ohio is one of the 10 richest gaming states in the country, with operators generating gross gaming revenue (GGR) of about $3.29 billion in 2024. Nearly $1 billion came from the state's four commercial casinos, $1.4 billion was generated at the state's seven racinos, and $900 million came via online and in-person sports betting.
The potential annual revenue from iGaming in Ohio, as concluded by the Study Commission on the Future of Gaming in Ohio, is over $500 million. However, the commission also emphasised the need for a careful and thoughtful approach to the expansion of gambling, not a rushed process.
Kevin Egan, an economics professor at the University of Toledo, supports the idea of higher taxes, stating that higher costs of entry lessen the likelihood of a consumer becoming addicted to sectors or businesses considered unethical or morally reprehensible.
However, not everyone agrees with this approach. Christian Imboden, an economics professor at Bowling Green State University, warns that if statutory tax rates get too high, buyers may seek underground markets, which may come with worse externalities.
A total of 15 economic experts also agreed that higher taxes would similarly lessen public ills from tobacco and cannabis consumption.
Currently, Ohio's casino and racino tax rate is lower than Pennsylvania and New York but higher than several other marquee land-based markets, including Illinois, Michigan, Mississippi, Nevada, and New Jersey. Online and retail sportsbook revenue in Ohio is subject to a 20% tax, which is the sixth-highest among the 39 states and Washington, D.C. where sports gambling is allowed.
The expansion of gambling in Ohio, as suggested by the Study Commission, should be considered with caution and thoughtful implementation, not through a rushed process. This is particularly important as Ohio lawmakers have been presented with an iGaming measure, but Senate Bill 312, which aims to legalize online casino gambling, has stalled in the Senate Finance Committee.
As the discussion about gambling taxes and expansion continues, it's clear that Ohio's gambling industry will continue to be a topic of interest and debate in the coming months.
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