CINCINNATI — When Ohio legalized sports betting last year, it joined New York as the second state to pledge sports betting tax proceeds to youth sports. This year, state lawmakers are calling an audible.
Ohio’s next operating budget will restrict, reduce or eliminate funding for youth sports, depending on which provisions survive a House-Senate conference committee that is expected to finalize the spending plan by June 30.
The youth sports provisions are among several changes outlined in the budget for the sports betting industry. Others include a proposed doubling of Ohio’s tax rate on sports wagers to 20% and new language that would let Ohio’s three largest counties — including Hamilton — have up to seven retail sportsbooks instead of five.
Ohio’s sports betting industry generated about $6.4 million in tax proceeds in its first four months. Budget documents say that could rise to $135 million in the 12 months starting July 1, if Governor Mike DeWine’s tax hike remains in the final version of the budget.
Ohio law currently requires 98% of sports betting tax proceeds to be split equally between education and K-12 athletics/extracurricular activities.
But this year’s budget includes several provisions that would modify the original plan:
- The governor’s budget calls for any funds earmarked for sports to be used first to “reduce or eliminate pay-to-play fees for interscholastic athletics and extra-curricular activities.”
- The House budget calls for sports spending to be capped at $15 million per year, with at least $500,000 of that amount “to fund adaptive sports programs in school districts across the state.”
- The Senate budget would eliminate funding for youth sports by requiring 98% of sports betting tax proceeds to be distributed according to Ohio’s funding formula for education.
“We intend to fight the Senate on this issue,” said Rep. Bill Seitz, R-Green Township, in an email to WCPO 9 News. “To my dismay, the Senate has chosen to eviscerate the original sports gaming bill in this regard by appropriating not a farthing for sports and extra-curricular activities, but rather, putting it all in school funding.”
Seitz said the House decided to cap spending on sports and extracurricular activities because $15 million was “the approximate amount” that lawmakers expected sports betting to generate.
“It was originally anticipated that the sports gaming tax would only amount to about $25 million per year,” Seitz said. “We now find that it is vastly more revenue-productive than that.”
Seitz said the sports funding provisions are “one of 883 points of difference between the House and Senate versions of the bill. At this point, it is quite impossible for me to predict what is likely to be in the final budget bill.”
Ohio’s plan for sports betting taxes has long been a mystery, as the WCPO 9 I-Team learned last May when it asked leaders of the House and Senate, gambling regulators and the Department of Education to explain how the funds would be distributed for sports programs. The Office of Management and Budget pointed to language in the sports betting bill, which said funds would be “determined in appropriations made by the General Assembly.”
Based on that lack of detail, some are not surprised that legislators are now considering an end to sports funding before the first appropriations were made.
“I don’t think anything in government surprises me anymore,” said Scott Kaufman, athletic director at Lakota West High School. “Here’s the one thing we do know that is a statistical fact: Kids that are involved in student activities, whether it’s athletics or music or drama are going to be more successful in the classroom.”
One group impacted by the changes is Adaptive Sports Ohio, which currently receives $250,000 in state funding to help school districts establish wheelchair basketball teams. It’ll have 16 districts with programs this fall and hopes to reach 100 within five years.
“The House version would help us grow a lot more quickly,” said Lisa Followay, executive director of the Wooster-based nonprofit. “It would help us support a lot more school districts. It would help us see more students with disabilities participating in athletics. However, with the Senate version, we’re still going to receive support and still be able to move forward.”
