Ohio bill proposes fees on sports bets to fund stadiums and schools
Ohio Republican State Sen. Louis Blessing III has introduced legislation that would impose a 2% fee on sports wagers, directing revenue toward public sports stadiums and K-12 education funding.
The proposed charge would sit on top of Ohio’s existing 20% tax on sports gaming receipts. Blessing said the bill had the potential to generate an additional US$200 million per year.
“If we really do put school funding to bed for the foreseeable future – it’s a public good and again people forget that school funding is in fact property tax relief,” he said.
However, Columbus-area Democratic State Sen. Bill DeMora expressed doubt about those projections. He commented, “Why are we just taxing gambling because some people don’t like it, including the governor, who doesn’t like anything that’s fun?”
The proposal drew comparison to a similar plan put forward by Gov. Mike DeWine during the previous budget season.
Separately, Ohio Attorney General Dave Yost posted on X that the state had put prediction market Kalshi on notice that its event contracts constituted unlawful gaming and proposed a US$5 million fine. Yost added that a federal court had already agreed with Ohio’s interpretation of the law.
Kalshi was the first regulated, dedicated financial exchange in the US built for trading on the outcomes of future events.
Charlotte Capewell brings her passion for storytelling and expertise in writing, researching, and the gambling industry to every article she writes. Her specialties include the US gambling industry, regulator legislation, igaming, and more.
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The Backstory
How a 2% fee on sports bets became Ohio’s latest funding lever
Ohio’s push to add a 2% fee on sports wagers to help pay for public stadiums and K-12 education arrives after two years of policy turbulence that has reshaped the state’s gambling market, public finances and political alliances. Since legal sports betting went live in 2023, the industry has delivered hundreds of millions in tax revenue while generating blowback over advertising saturation, player safety and the scope of permissible wagers. Those crosscurrents set the stage for a fresh attempt to extract more from betting without reopening the core law — and to tether the proceeds to visible public goods.
The fee, layered on top of Ohio’s existing 20% tax on sports gaming receipts, echoes earlier budget-cycle talk of capturing more value from betting to address structural needs. It also tests how far lawmakers can go before pushing bettors and books to neighboring states or offshore apps. The debate is unfolding as other policy fights — from proposition bets to online casinos to prediction markets — pull regulators and legislators in different directions, complicating forecasts for any new carve-out of wagering revenue.
Political whiplash since launch
Gov. Mike DeWine’s evolution underscores the volatility. He signed the 2021 law that enabled online and retail sportsbooks, then later said he regretted doing so amid scandals in pro leagues and concern over the industry’s promotional reach. In a recent interview, the governor argued the power of betting operators to market aggressively changed the risk profile once legalization took hold. That reversal, after the first year of live wagering, colored subsequent debates over what kinds of bets Ohioans should be allowed to place and how tightly the state should police the market. For a fuller account of DeWine’s shift, see this report on how the governor came to regret legalizing sports betting.
As controversy mounted, especially around player harassment and game integrity, DeWine urged regulators to curb proposition wagers — bets on discrete in-game outcomes — particularly in light of investigations involving Cleveland athletes. His administration’s posture helped reframe sports betting not only as a revenue source but as a potential threat to athletes and public trust. That emphasis on integrity now overlaps with the latest push to channel betting-derived funds to schools and stadiums, two institutions intertwined with civic identity and, often, sports themselves.
Prop bets become a flashpoint
The governor’s call to limit prop bets quickly met resistance in the House. Rep. Brian Stewart said prop markets are popular with consumers and significant contributors to tax receipts since the 2023 launch. He framed the products as part of the bargain Ohio made when it legalized betting with bipartisan support. Lawmakers have already banned college prop bets, but further curbs would narrow the product set for a sizable share of customers and, by extension, the revenue that could underwrite new fees for public projects. Stewart’s stance is detailed in this piece on opposition to banning prop bets.
The dispute matters for the proposed fee. If prop offerings are restricted, handle and hold could fall, weakening the base that a 2% surcharge would draw from. Conversely, keeping popular bet types alive may bolster receipts but inflame concerns about player safety and integrity. The balancing act illustrates how the same policy instruments that maximize revenue can collide with social guardrails that politicians in both parties want to enforce.
iGaming expansion stalls amid addiction and cannibalization fears
Another arena where policy choices influence the betting tax base is internet casino gaming. Bills in both chambers would authorize online slots and table games, potentially adding a revenue stream that supporters say could top $600 million a year. DeWine has rejected that expansion, arguing that putting a “casino in everybody’s hands” would worsen addiction and strain communities. Brick-and-mortar operators have echoed those warnings, saying digital products would siphon customers and jobs. The contours of that clash are laid out in coverage of DeWine’s opposition to iGaming.
For backers of the sports-bet fee, the stalemate on iGaming is both constraint and opportunity. If full-scale casino play stays offline, policymakers looking to fund big-ticket items like stadium renovations and education may find fewer levers than promised during Ohio’s gambling expansion. A narrow, targeted fee on an already-legalized activity could be an easier political sell than authorizing entirely new forms of wagering. But it also concentrates fiscal bets on a single vertical that has shown it can be buffeted by regulatory and integrity shocks.
A legal perimeter under stress
Ohio’s effort to define, and defend, the boundaries of sports betting has spilled into federal court. Prediction market Kalshi, which offers “event contracts” on real-world outcomes, sued the Ohio Casino Control Commission and Attorney General Dave Yost, saying the state’s threats to block its sports-related products and penalize partners were unlawful. Ohio argues that only licensed operators can offer sports bets to state residents and that sportsbooks risk their own licenses if they collaborate with unlicensed markets, even outside Ohio. The litigation, described in detail here, is a test of how far states can extend their regulatory reach over novel financial-betting hybrids.
The outcome could ripple into the fee debate. If courts narrow Ohio’s grip over adjacent markets, enforcement may become more complex, making it harder to ensure that a new surcharge captures as much activity as intended. If the state prevails, it strengthens the compliance perimeter and may reassure lawmakers that additional levies can be collected with less leakage to gray markets.
A look across state lines
Other states are experimenting with blended tax and relief models that may inform Ohio’s approach. In Mississippi, a fresh push to legalize online sports betting couples a 22% tax on mobile operators with cuts to brick-and-mortar gaming rates, plus a fund to offset losses for casinos that do not partner with mobile platforms. The plan directs residual revenue to the state’s pension system, highlighting how lawmakers are tying wagering proceeds to long-term obligations. For context, see the breakdown of Mississippi’s mobile betting bill and casino tax reductions.
The Mississippi structure underscores the trade-offs Ohio faces. Earmarking sports-bet proceeds for stadiums and schools can sharpen public support, but tinkering with rates can either cushion or amplify pressure on retail operators. A tightly calibrated fee that preserves competitiveness while delivering predictable dollars is the goal, yet the experience elsewhere shows how difficult it is to balance growth, fairness and fiscal reliability.
Taken together, Ohio’s proposed 2% fee is less an isolated revenue grab than the latest chapter in a broader recalibration. Leaders want to capture stable funds for highly visible needs without fueling the risks that have soured public opinion on parts of the market. Whether the state can thread that needle — amid fights over prop bets, stalled iGaming plans and courtroom battles over what counts as a sports wager — will determine if the fee delivers the $200 million annual windfall its sponsor envisions or becomes another waypoint in an unsettled policy map.
