Louisiana and Ohio have both taken a different approach to the debate on sports betting taxes. In Louisiana, an increase in tax on online sports gambling has been temporarily shelved. Ohio is now considering reducing the current tax rate.
Louisiana puts a hold on a major tax hike for online sports betting
House Bill 22 was recently stopped by Louisiana lawmakers. It was proposed by Rep. Roger Wilder, R-Denham Springs. This bill aimed to raise the tax rate for online sports betting, from 15% to 51%. It would have placed Louisiana in line with states such as New York and Vermont that are known to have the highest sports gambling taxes in the country. The increase proposed was part of an effort led by Governor Jeff Landry, to offset revenue loss due to the anticipated state income tax cut.
According to estimates by the Legislative Fiscal Office (LFO), raising the tax from 49% to 51% could potentially increase state revenues by about $151 million per year. Rep. Wilder, who is a member of the House Ways and Means Committee, decided, at a recent meeting, to stop further discussion about the bill. She cited he needed to better understand industry and get input from stakeholders. This decision effectively shuts down the proposal until the end of the current special session which ends on November 25.
Representatives from the industry expressed serious concerns over the proposed tax increase. Samir Moad, representing Caesar’s operations in New Orleans, emphasized that such a dramatic increase could deter new investments in Louisiana. He cited Caesar’s financial backing of Caesar’s Superdome as an example of commitments that might not have materialized under a 51% tax structure.
A diverse coalition of groups, including Louisiana Progress (a progressive group) and the conservative Louisiana Family Forum, supported the proposed bill. Mike Johnson, the House Speaker Pro Tempore (R-Pineville), also supported the measure. He argued that the additional revenue would be used to address the social costs of gambling addiction. Johnson stressed that the industries responsible for public health issues must also be included in the mitigation of their effects.
Currently, Louisiana’s online sports betting market handles roughly $3 billion in bets annually, generating between $250 million and $300 million in revenue for operators. The state currently receives $54 million from taxation under the current 15% tax rate. If HB 22 had passed, the projected tax revenue for 2023-24 would have risen to $182.7 millions. However, experts expressed skepticism about whether Louisiana’s smaller market could sustain such a high tax rate, noting that larger states like New York have managed to maintain a 51% rate despite industry resistance.
Ohio Could Reduce Sports Betting Taxes to 10%
Ohio has taken a completely different approach. State Senator Niraj Antani has introduced Senate Bill 190, aiming to reduce the state’s sports betting tax rate from 20% to 10%. Antani, a state senator who played a major role in the legalization of sports betting in Ohio for 2022, thinks that the 10% tax rate is optimal to promote industry growth and competition. The Senate Finance Committee is currently reviewing his proposal.
In a statement to the committee, Antani argued that Ohio’s 20% tax rate, implemented as part of the 2024-2025 state budget, places the state at a disadvantage regionally and nationally. In terms of tax rates, he said that Ohio is ranked sixth out of 38 states which have legalized sports betting. Iowa and Nevada, for example, have significantly lower tax rates. Antani warned Ohio businesses that states such as Kentucky Michigan Indiana West Virginia and Indiana offer better tax conditions.
Antani stated that he would prefer a tax rate as low as 6.75 percent, the lowest of any country in the world, but saw a return at 10% to be a reasonable compromis. He believes that a reduced tax rate will increase market stability and appeal while maintaining revenue. Mike DeWine, the Governor, had previously endorsed Ohio’s 20% tax rate. This was approved by the Ohio Legislature to increase the state revenue. The money would be used primarily for education (98%) as well as problem gambling (2%).
Antani claims that, despite the financial benefits intended by a higher rate of taxation, a lower rate will not only make Ohio more competitive but will also create a market with a greater longevity and robustness for consumers and betting operators. Senate Bill 190, if passed, would amend Section 5753.021 in the Ohio Revised Code to reduce the tax rate for sports betting income. The bill, if enacted, would take effect on the first day of the month following its passage, reflecting Antani’s vision of balancing state revenue needs with market growth and competitiveness.
The Sports Betting tax landscape elsewhere
Sports betting tax rates in the United States vary greatly from one state to another, reflecting different approaches to revenue generation and regulation. New Jersey, a state that has been a major hub for sports betting ever since it was legalized in 2018, charges an 8.5% tax rate on bets placed in person and 13% on bets placed online. This relatively moderate structure is a key factor for the rapid growth of its market and high revenues. Pennsylvania has one of the highest tax rates in the country, at 36%. It includes both the state tax and the local share assessment. Pennsylvania is still a major market despite the high tax rate. However, some experts believe that it could deter smaller operators.
In contrast, states like Nevada have maintained a more traditional tax rate of 6.75% for sports betting revenues, which is among the lowest in the U.S. As a longtime leader in the gambling industry, Nevada’s tax structure has attracted a variety of operators and maintained its competitive edge despite new challengers in the market. States such as Colorado and Iowa have also opted for lower tax rates—10% and 6.75%, respectively—enabling them to strike a balance between generating state revenue and fostering competitive market conditions.
Sports betting tax policies in Europe vary significantly from country to country, and are often based upon historical betting patterns and local regulations. In the United Kingdom, for example, licensed operators are subject to a 15% tax. This model has created a market that is highly competitive, with many operators and an array of betting options. Meanwhile, Germany’s sports betting taxes include a 5% levy on each bet placed, which some critics argue limits the profitability of operators compared to other markets. Spain and France both have their own tax systems, based on gross gaming revenues, or turnover. These taxes affect how competitive the markets remain in comparison to other European counterparts.
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