The Economic Impact of Ohio’s Booming Gambling Industry: A Closer Look at the $3 Billion Milestone

While sports gambling has only been operational in the state of Ohio for six months, with sportsbooks going live on January 1 of this year, the Buckeye State has already established itself as one of the biggest winners in the country in terms of the amount of bets being placed.

Sources announced toward the end of May that more than $3 billion in bets had been placed through April 30. However, this hectic pace is expected to slow down considerably over the summer months. Firstly, the two busiest betting events of the year, the Super Bowl and the NCAA Men's Basketball Tournament, have already passed. Consequently, there won't be as many bets placed during the summer when Major League Baseball is one of the only sports leagues in action.

Another factor to consider is that there was always going to be a rush during the first few weeks that the sportsbooks were operational, as prospective bettors worked to take advantage of sign-on bonuses and were swept up in the initial frenzy. Now, we will get a good look at what we can expect from the industry moving forward as bettors and sportsbooks settle into their natural rhythm.

One thing that has helped Ohio reach the lofty $3 billion milestone is the abundance of teams, both college and professional, that reside in the state. With two NFL teams (the Cleveland Browns and Cincinnati Bengals), two MLB teams (the Cleveland Guardians and Cincinnati Reds), the Cleveland Cavaliers of the NBA, the Columbus Blue Jackets of the NHL, as well as perennial powerhouses like the Ohio State Buckeyes, sports fans from Ohio have sporting events to keep them busy (and betting) all year long.

It also doesn't hurt that teams like the Reds are amidst massive hot streaks (they just reeled off 12 straight wins, catapulting them toward the top of their division standings), which imbue their fans—as well as opportunistic bettors—with a sense of hope.

Currently, the Reds sit at or around +8000 at various PayPal Betting Sites, solidly in the bottom half of the league. However, if they can take advantage of a weak NL Central division to sneak into the playoffs, anything can happen. Last year, no one expected the Philadelphia Phillies to come within two games of winning the World Series after a similar performance.

Odds and promotions can vary significantly from sportsbook to sportsbook, so it's crucial to shop around first if you believe you have a winning bet. That way, you can ensure that you're locking in the best possible odds of winning big.

Now, let's take a look at how the advent of sports betting in the Buckeye State is projected to impact the economy beyond the straight dollar value raked in.

As of right now, Ohio levies a 10 percent tax on sportsbook operators for the gross revenue they generate. This differs from the $3 billion handle, which applies to the total dollar value of every bet placed. Operators are only taxed on the wagers that don't win.

After witnessing the wealth of bets placed ahead of the Super Bowl, Ohio Governor Mike DeWine proposed doubling that tax rate to twenty percent in an attempt to capitalize on the growing market. However, legislators rebuffed him, stating that they wanted to ensure it remained profitable for sportsbooks to continue operating, making it harder for potential black market bookies to snatch up any revenue that would otherwise go to the state.

That said, we could see some shakeup in the next two days as the state must approve its rules for the upcoming fiscal year by June 30. If there are any last-minute additions or rider bills as legislators try to finalize everything, DeWine might get his wish.

Regarding the tax revenue itself, the Ohio state budget designates it for a pair of funds. According to the Ohio Department of Taxation, "Ninety-eight percent of the net revenue benefits the education needs of Ohio, funding interscholastic athletics and other extracurricular activities for youth. The remaining two percent goes toward efforts to alleviate problem sports gaming. The Department collects all tax revenue and allocates such revenue to the appropriate funds on a quarterly basis."

Even this allocation could change in the coming days as the state legislature decides on the fiscal plan for next year. It will be interesting to see if any shakeups occur, such as proposals focusing on directing the money to schools rather than sports, or if they choose to stay the course.