Ohio Governor Mike DeWine is eyeing his second tax increase on sports gambling operators in the last two years. In his latest two-year budget proposal, Ohio's sports gambling tax rate would double from 20% to 40%, making it the third-highest tax rate in the nation.
Two years ago, mere months after sports gambling launched in The Buckeye State, DeWine doubled the tax rate from 10% to 20%. Now he wants to do it again to help fund upgrades to an aging Paycor Stadium, as well as other major sports infrastructure upgrades and projects across the state.
That's what you call a money grab. And for the wrong reasons.
Sports Infrastructure Projects Are Bad Business
Let's first start out by understanding that Paycor isn't an old stadium. At 25 years old, it's about the average age of an NFL stadium. So needing a proposed $1.2 billion in upgrades seems silly for what is still a relatively young stadium. Not to mention that the county already paid $39 million for upgrades at the end of 2023.
We also have to understand that big city investments in major sports infrastructure aren't in the best interest of communities. Studies have consistently shown that there is no economic benefit to spending hundreds of millions of taxpayer dollars on these projects.
For example, while Hamilton County owns Paycor Stadium, it does not generate revenue from it, including getting $0 in the $66 million naming rights deal paid by Paycor to the Bengals.
Spending hundreds of millions of Ohioans' money to upgrade a stadium is just bad business for the state.
Missing His Mark
Per DeWine, the state believes it could generate an extra $130 to $180 million with this tax increase. Speaking about his proposal, DeWine believes sports gambling operators, whom he termed as "extremely aggressive," are fair targets to help pay for these upgrades because they target young people.
While he's not wrong in asserting that sportsbook operators can be aggressive, why isn't the money collected from taxes being diverted to gambling education programs or problem gambling programs instead of sports infrastructure projects that will only increase the issue DeWine is highlighting?
Under Bill 29, the bill that legalized sports gambling in Ohio in 2023, only 2% of tax revenue collected from sports gambling goes to the Ohio Problem Gambling and Addictions Program. Why not increase that rate by double or even double it twice to match the tax rate increases?
Again, it seems like DeWine is increasing tax rates on sports operators for all the wrong reasons. Not only is he seemingly arbitrarily targeting operators with round after round of tax increases, but his increases do nothing to address his issues with sports gambling and are completely missing the mark.
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