Ohio could soon join the growing list of states with legal online casino gambling. Rep. Brian Stewart, chair of the House Finance Committee, has confirmed he is drafting legislation to legalize iGaming throughout the Buckeye State, creating a new revenue stream without raising traditional taxes.
The push for online casino legalization comes after House Republicans stripped several proposed tax increases from Gov. Mike DeWine's budget plan, including a measure that would have doubled the sports betting tax rate from 20% to 40%.
"We're looking at ways to allow wider access to casino games via mobile devices and computers while creating a new source of revenue," Stewart told WOSU Public Media.
This marks the second legislative attempt in less than a year to legalize online casino gambling in Ohio. Former Senator Niraj Antani, who helped spearhead sports betting legalization, introduced a similar bill last fall that would have tethered licenses to the state's 11 existing casinos and racinos.
The current legislative effort follows recommendations from the Study Commission on the Future of Gaming in Ohio, which completed its work in July 2024. The commission was established two years ago through a clause in the state budget.
In their final report, commission members Reps. Jay Edwards, Jeff LaRe, and Cindy Abrams wrote: "While the state should proceed with caution and care with any expansion of this magnitude, with the right regulatory framework, these types of gaming can thrive with nominal impact to our current system."
The report highlighted that states with legal online gambling have experienced substantial tax revenue increases due to high public demand. Importantly, the commission found that online casinos don't necessarily cannibalize revenue from land-based venues but can expand the overall market by attracting new players.
The push for legalization is bolstered by the success seen in neighboring states:
Pennsylvania legalized online casinos in 2019, and operators generated $1.5 billion in revenue last year. With tax rates of 54% on slots and 36% on sports betting, the state collected approximately $2.66 billion in gambling tax revenue and fees in 2024.
Michigan, which legalized online casinos in 2021, saw $1.2 billion in revenue from state-licensed online casinos in 2024, generating around $500 million in taxes with rates between 20-28%.
Commission members suggested that tax revenue from legalized iGaming could support public services, with a particular emphasis on K-12 education funding.
Ohio's gambling landscape indicates significant potential for online casino expansion. The state's 11 land-based casinos generated approximately $1.1 billion in revenue in 2024, while Ohioans wagered nearly $8.9 billion on sports last year, resulting in $899 million in revenue for licensed operators.
However, a report by Yield Sec published last month revealed that unlicensed operators—including sweepstakes casinos, offshore sites, and prediction markets—generated an estimated $3.7 billion from Ohio users last year, suggesting substantial untapped potential for regulated online casino gambling.
Not all stakeholders support the expansion. Owners of Ohio's four casinos and seven racinos have expressed concerns that online websites could reduce foot traffic at their physical locations. Several lawmakers on the study commission also voiced reservations about expanding the gambling industry and its potential impact on existing venues and the state lottery.
Stewart's proposal emphasizes the need to implement iGaming policies that won't harm existing gaming centers while capturing revenue currently flowing to unregulated operators.
As the Ohio Senate revises the House's state budget, the online casino legislation could become a focal point of discussions on how to address the state's financial needs without pursuing controversial tax increases or continuing Ohio's seven-year streak of income tax cuts.