Economists Opine Higher Taxes Could Mitigate Gambling Harms in Ohio

Posted on: March 19, 2025, 09:14h. 

Last updated on: March 19, 2025, 09:47h.

Devin O'Connor @CasinoorgDevinO Read More

Expertise: Asia Pacific Gaming, Commercial Gaming, Legislation, Politics.

• Economists in Ohio say higher taxes on casinos and sportsbooks could help lessen problem gambling
• Gov. Mike DeWine wants to double the state’s tax on sports betting
• Some economists wonder if higher taxes could make illegal gambling ops more attractive

Numerous economists in Ohio were asked to review how societal harm caused by so-called “sin industries” could be reduced, and they largely agreed that increasing taxes would help.

Scioto Analysis, an Ohio-based market research firm that provides policymakers with “evidence-based analysis of pressing public problems,” reports that 15 of 17 economists polled agreed that increasing state taxes on gambling revenue would help reduce the negative impacts stemming from casinos and sports betting. The same 15 economic experts said higher taxes would similarly lessen public ills from tobacco and cannabis consumption.

March is Problem Gambling Awareness Month. Kevin Egan, an economics professor at the University of Toledo, says higher costs of entry lessen the likelihood of a consumer becoming addicted to sectors or businesses some holier-than-thou people consider unethical or morally reprehensible.  

It is vital to have higher taxes on cannabis, gambling, and tobacco to increase the chances the consumers of these products are recreational users, as they all intend to be initially. However, some become addicted and regret it. The higher taxes will reduce addiction problems later,” Egan said.

Higher taxes on casino and sportsbook operators would presumably lead to fewer incentives for their customers like free slot play and betting promotions. 

Ohio Gambling Industry

Ohio is one of the 10 richest gaming states in the country, with operators generating gross gaming revenue (GGR) of about $3.29 billion in 2024. A little more than $1 billion came from the state’s four commercial casinos, $1.4 billion was generated at the state’s seven racinos, and $900 million came via online and in-person sports betting.

Ohio’s casino and racino tax rate is, however, lower than Pennsylvania and New York where state governments take about half of their net revenue from slots.

Online and retail sportsbook revenue is subject to a 20% tax, the sixth-highest of the 39 states and Washington, DC, where sports gambling is allowed. Still, Gov. Mike DeWine (R) wants to double the state’s sports betting tax to help fund professional sports stadiums.

While the bulk of the economists surveyed think higher taxes could help lessen gambling’s appeal, concerns were raised about whether that might make illegal options more attractive.

If statutory tax rates get too high, buyers may seek underground markets, which may come with worse externalities,” said Christian Imboden, an economics professor at Bowling Green State University.

“Excessively high taxes can shift the industry toward illegal organized crime who are able to escape the tax and that can cause worse externalities than a legal, regulated industry,” added Jonathan Andreas of Bluffton University. 

Ohio Online Gaming on Hold

Ohio lawmakers were presented with an iGaming measure in September, but the bill to legalize online casino gambling hasn’t garnered any traction in the Columbus capital. State Sen. Niraj Antani (R-Miamisburg) is behind Senate Bill 312, which has stalled in the Senate Finance Committee.

Last year, the Study Commission on the Future of Gaming in Ohio concluded that the state could reap in excess of $500 million a year from iGaming, but such expansion of gambling should be considered with “caution and thoughtful implementation” and not “through a rushed process.”