Ohio’s unprecedented sports betting tax hike as part of an omnibus budget bill signed into law by Gov. Mike DeWine last week wasn’t the only change setting it apart from other legalized states.
The Ohio General Assembly’s conference committee version of HB 33 approved by lawmakers last week also included a first-of-its-kind provision to ban from sports betting those “who threaten violence or harm against persons who are involved in sporting events.”
Like doubling the state’s tax rate from 10% to 20%, which took effect July 1, the attempt to ban angry bettors who use social media or other means to threaten athletes who cost them money was first put forth by DeWine as part of his budget proposal in February.
Neither the tax hike nor the ban received public discussion in Ohio’s enactment of a wide-ranging, 6,198-page budget document covering $191 billion in planned spending in the next two fiscal years. The bulk of debate and controversy revolved around broader issues such as education spending and personal income taxes.
Among other changes that were part of HB 33 just half a year after legal sports betting began in the state, a broad study is to be undertaken of Ohio’s entire gambling industry — the lottery, casinos, racinos, and horse racing in addition to sports betting — and the use of sports betting tax dollars will no longer be dedicated in part to interscholastic sports and extracurricular activities.
New challenge for Ohio regulator
The provision applying to bettors who threaten athletes comes in the wake of heightened concern about such behavior in Ohio and nationally as legal sports betting has become increasingly common across the U.S.
Ohio has been a focal point, in that officials with the University of Dayton basketball program noted in January how players had been attacked on social media after a loss. Basketball coach Anthony Grant alluded to the harsh side-effects of the new sports betting law in decrying how “we have people that make it about themselves and attack kids because of their own agenda. It sickens me.”
His anger prompted Ohio Casino Control Commission Executive Director Matt Schuler to bring up the issue at a January commission meeting, stating the agency may need to consider banning bettors who direct hateful messages toward college athletes on social media.
“We obviously don’t have control over people’s behavior, but we do have control over what venues they can choose to participate,” he said.
It’s unclear if Schuler and the OCCC looked into the issue any further since then, but the legislature assured that will be the case as part of the budget approved in both the House and Senate. And it aims to address broader threats than just those against collegians.
Those who make threats “against persons who are involved in sporting events, where the threat is related to sports gaming” are to be added to the OCCC’s list of individuals whose behavior excludes them from the right to participate in sports betting in the state in any form. The names of such individuals are to be shared with sportsbook operators in the state, who would be expected to deny acceptance of any wagers from them.
What’s unclear, however, is just how the state commission will go about finding and identifying such individuals.
There’s a widespread world of commenters on social media who do not publicly disclose their actual identities, and distinguishing between their sharp criticism and what amounts to a threat meriting an involuntary ban could present its own challenges. Many of those individuals, even if commenting angrily on sports events in Ohio, may also be from outside the state and unaffected by any ban.
In an email sent late Wednesday afternoon, OCCC spokeswoman Jessica Franks said that in practical terms, the agency will not be needing to create any new regulations or guidelines to implement the provision. It has procedures in place for adding individuals to its involuntary exclusion lists for sports gaming or casino gambling, and she said those will now also apply to anyone suspected of violating the law by exhibiting threatening behavior.
The language in the law “is guidance from the General Assembly that making threats against athletes is unacceptable and threatens the integrity of sports gaming,” Franks said, without spelling out just how the regulator would monitor such behavior.
Broad study coming of gambling in Ohio
Ohio’s original legislation authorizing sports betting called for a six-member joint committee of lawmakers from both chambers to study the impact of the new form of gambling and recommend any changes. That committee was never formed, and the new budget legislation now envisions a much broader study that could impact the gambling industry’s future.
An 11-member Study Commission on the Future of Gaming in Ohio is to be created and report findings and recommendations by June 30, 2024. It will have three members representing the majority Republicans in the House, three GOP members from the Senate, one Democrat each from the House and Senate, and three members named by the chairmen of the OCCC, Ohio Lottery Commission, and Ohio State Racing Commission.
Instead of focusing only on the effects of the new sports gaming law, the study commission will look at all aspects of gambling in the state.
No timetable has been provided on how soon the members will be appointed and work will begin toward producing the “findings and recommendations to the General Assembly” within the next year. After issuing a report by next June, the study commission is to disband.
Tax revenue reallocated to general education
While sports betting operators and those who wager have no direct interest in how the tax revenue from the activity is used, Ohio officials have a particularly keen interest considering it is already bringing in more money than anticipated and will be even more so the case with the tax hike.
Sports gaming generated $50.7 million in tax revenue in the first five months, which would have been $101.4 million if the new tax rate had already been in effect. The state’s budget forecast anticipates the fiscal year that started July 1 will net at least $100 million more in additional revenue with a 20% instead of 10% tax rate.
The vast majority of that revenue — excepting 2% to be used to address problem gambling related to sports betting — goes to the Sports Gaming Profits Education Fund. Under the original sports gaming law, half of the revenue in the fund was to be used to support interscholastic athletics and other extracurricular activities in kindergarten through grade 12.
The new legislation crosses out the specific reference to funding such purposes, leaving the dollars to be distributed more broadly for education. Now, the funds “shall be used for the support of public and non-public education for students in grades kindergarten through 12 as determined in appropriations made by the General Assembly.”
