Ohioans are inundated with advertisements for a new online sports betting service that will launch on Sunday, the first day of the new year.
Many of the ads offer users promotional bet credits for signing up. This can significantly increase the number of sports game receipts filed by businesses.
In Ohio, corporations are taxed on 10% of the sports game owner’s net income from sports games. The tax will be charged on the owner’s “sports game receipt”. This includes the total amount received as stake.
While some states such as Maryland and Virginia have legal sports betting programs without taxing this type of promotional wager, Ohio does something else. .
The Ohio Casino Regulatory Commission reports that state law is structured to prevent companies from deducting promotional credits during the first four years of operation. After that, the state will limit promotional credit wagering deductions to 10% from 2027 to 2031, and 20% from 2032 onwards.
This structuring is expected to limit the negative impact of these promotions on tax collection from Ohio owners.
Online sports betting started in Maryland on November 23rd. By the end of the month, according to Play Maryland, bettors had placed $186.1 million in bets, with about a third of those bets being promotional “free” bets. As such, the state collected just $4,262 in taxes from online sports betting.
“They gave away so many of these credits that they completely whittled away what the state could actually tax,” said sports betting regulation reporter Robert Linehan.
Virginia initially allowed businesses to deduct advertising wagers, but after reports the state was losing revenue, lawmakers changed the law to end deductions. did.
Sports betting companies are now flooding the state with advertising and promotional offers as they battle for new market share, Rinnehan said. Expect the promotion to shrink as you find more services.