New Legislation To Remove Sports Betting Tax Introduced

On Friday two congressmen introduced a joint bill to abolish the federal excise tax on legal sports bets.

Reps. Dina Titus (D-Nevada) and Guy Reschenthaler (R-Pennsylvania) — co-chairs of the Congressional Gaming Caucus which was relaunched earlier this year — co-sponsored the bill, according to a news release, that would end a 0.25 percent tax on the handle for legal bets. Organisations who pay the excise tax often have to pay an additional $50 per employee tax on those that work in sportsbooks.

The bipartisan caucus has more than 30 members of the Congress, which raises concerns about the gaming industry.

In a news release Titus said:“Sports are back. Unfortunately, the penalty on making legal sports bets never left. The handle tax makes it more difficult for legal gaming establishments to compete with illegal operators.

“Repealing it will push more consumers out of the black market and into a well-regulated market. Forcing sportsbooks to pay a per-employee tax is the last thing we need when gaming establishments are still making announcements about new rounds of layoffs and furloughs.”

Titus reported that Nevada ‘s gaming operations charged around $13.3 million in handle taxes in 2019 — like every state with legal sports betting.

The American Gaming Association also praised the new rule. AGA President and CEO Bill Miller said in a statement: “Eliminating these taxes is a long overdue step to enable a legal, regulated environment for sports betting that will better protect customers and generate much-needed revenue for state and local economies.

“The federal excise and head taxes levied on legal U.S. sportsbooks generate little meaningful revenue for the government. Instead, they place legitimate businesses at a significant competitive disadvantage against illicit gambling operations which skirt taxes and licensing fees.”

Since the early 1950s the taxes have been in place to deter illegal gambling, the AGA said, but they “now give illegal operators a leg up.”

Reschenthaler said the bill would abolish “an outdated tax and burdensome requirements on the gaming industry.”

“Gaming is a vital economic driver in Pennsylvania, supporting over 33,000 jobs,” Reschenthaler said. “This bill will help pave the way for economic growth and job creation in my district and throughout the nation.”

Miller spoke before a hearing on college sports betting this week in the Senate Judiciary Committee and called for the excise tax to be abolished.

“Repealing the federal excise and head taxes levied on legal sports wagering operations is one important step Congress can take to help level the playing field and allow legal, regulated sportsbooks to more effectively compete,” Miller testified on Wednesday.