Last week, Ohio announced that its sports betting market will launch on Jan. 1, 2023. The debut will complete a long and careful process by the state to provide a regulated platform for legal sports betting.
Industry observers and Ohio leaders are curious to see how popular sports betting will be in the state, long considered one of the most attractive markets in the U.S.
How much will Ohioans wager on sports? How large will Ohio’s sports betting market be?
Ohio Could Be A Top 5 Sports Betting Market
The table below reveals the total sports betting handle (all wagers placed) for key states in the U.S., showing the most recent activity to provide a comparison.
|STATE||POPULATION||LEGAL STATUS||2021 HANDLE||JAN-APR 2022 HANDLE||AVG MONTHLY HANDLE||MAJOR PRO TEAMS|
|New York||20,201,249||Legal online since Jan 2022||$0||$6.2 billion (4 mos)||$1.5 billion||11|
|New Jersey||9,288,994||Legal since 2018||$10.9 billion||$4.3 billion||$950 million||3|
|Illinois||12,812,508||Legal since 2020||$7.0 billion||$2.5 billion||$593 million||5|
|Pennsylvania||13,002,700||Legal since 2018||$6.5 billion||$2.7 billion||$575 million||7|
|Ohio||11,799,448||Legal, launch date Jan 1, 2023||5|
|Arizona||7,151,502||Legal since||$1.7 billion (4 mos)||$1.1 billion (2 mos)||$466 million||4|
|Michigan||10,077,331||Legal since Jan 2021||$3.9 billion||$1.8 billion||$367 million||4|
|Indiana||6,785,528||Legal since 2019||$3.8 billion||$1.7 billion||$343 million||2|
|Colorado||5,773,714||Legal since 2020||$3.8 billion||$1.5 billion||$331 million||4|
|Tennessee||6,910,840||Legal since 2020||$2.7 billion||$1.3 billion||$250 million||3|
Last year, the Ohio Casino Control Commission, in coordination with the Ohio Legislative Service Commission, released a study compiled via a third-party research firm. In it, the OCCC estimated that sports betting would be a $1.1 billion industry in its first year in Ohio. Within “a few years,” the same report predicted a market of more than $3 billion.
As we can see in the table, Michigan, Indiana, and Colorado have each already surpassed $3 billion in a single year. For Michigan that occurred in its first full year of betting activity. It’s possible Ohio could soar past $3 billion in 2023, and push onward to $4 or $5 billion, seeing as Pennsylvania is at that level.
A few notes on the Ohio market and where it might go:
I’ve plugged Ohio in ahead of Arizona on the above table (based on average monthly total handle), and just below neighboring Pennsylvania.
It seems certain that Ohio’s sports betting market, once it matures, will be larger than Michigan’s, which has more than 1.5 million fewer citizens according to the 2020 U.S. Census. Also, Ohio is a notoriously sports-crazy state, with two urban areas that have major professional sports teams — Cincinnati in the south and Cleveland in the north. Ohio State is also one of the premier teams in college football, and often competitive in the Big 10 in basketball.
But, Pennsylvania has a 1.2 million-person edge in population over Ohio, which is why that state may keep ahead of its neighbor in the nationwide market. However, Ohio is arguably launching its market in a more coordinated manner, debuting all facets — retail, online, and casino-based — sports betting at the same time.
Put plainly, Ohio will benefit from the lessons learned elsewhere.
Major headache avoided: Ohio Sports Betting Tax Calculation Structure Changed To Help Sportsbooks
How Much Tax Revenue Will Ohio Get?
Beginning on New Year’s Day in 2023, Ohioans and anyone within state limits that meets age requirements can place bets on sports at casinos, racinos, within licensed professional sports venues, and at locations with a liquor license that are authorized to accept wagers. The vast majority of wagering will be done online, as mobile sports betting apps will launch on the same day, with as many as 25 licenses allowed by law.
How much could the sports betting activity in Ohio generate in tax revenue?
The same December 2021 study from the Ohio Legislative Service Commission estimates that with a 10% tax on net revenue from sports betting, Ohio could receive as much as $24 million in the first full fiscal year that the market is operational in the state.
Tax revenue from sports betting is divvied up this way in Ohio:
- 98% is earmarked for public and private K-12 education
- The balance funds problem gambling programs.
AP Photo/Mark J. Terrill