In a recent development in the legislative arena, Senators Catherine Cortez Masto of Nevada and Cindy Hyde-Smith of Mississippi have put forth a new bill that aims to eliminate the long-standing 0.25% federal excise tax on sports betting handle. This bipartisan effort has garnered support from lawmakers across party lines and chambers, signaling a renewed push to do away with a tax that many view as outdated and harmful to the legal sports betting industry. The proposed legislation, known as the Withdrawing Arduous Gaming Excise Rates (WAGER) Act, is designed to align with a similar bill in the House authored by Representatives Dina Titus and Guy Reschenthaler.
Senator Cortez Masto underscored the significance of abolishing the federal excise tax, pointing to Nevada’s flourishing sports betting sector as a prime example of how legal gambling can greatly benefit local economies. She stated, “My bipartisan legislation will ensure our sports gaming industry can provide essential tax relief to consumers and our sports gaming industry, creating more jobs and keeping our tax money in the state while cracking down on illegal activities.”
Senator Hyde-Smith echoed these sentiments, emphasizing the negative impact of the tax on Mississippi’s tourism-driven economy. She expressed, “By repealing this tax, our bipartisan WAGER Act will level the playing field, boost local economies, and ensure that gaming revenues stay here, supporting jobs and community investments.”
The American Gaming Association (AGA), a prominent trade group representing the gaming industry, has voiced strong support for the WAGER Act. The AGA argues that the excise tax, originally established over 70 years ago to combat illegal gambling operations, now puts legal operators at a competitive disadvantage. Bill Miller, CEO and President of the AGA, commented, “The AGA is thankful to Senators Cortez Masto and Hyde-Smith for their dedication to providing a safe, responsible sports betting market and to continuing to help migrate bettors out of the illegal market.”
While the WAGER Act has garnered significant backing, it faces competition from another piece of legislation introduced earlier this year. The Gambling Addiction Recovery, Investment, and Treatment (GRIT) Act, proposed by Senator Richard Blumenthal and Representative Andrea Salinas, aims to maintain the excise tax but redirect its revenue towards responsible gambling initiatives and problem gambling treatment.
The ongoing debate over the federal excise tax raises broader questions about the extent of federal oversight in the ever-evolving landscape of sports betting and iGaming. With sports betting becoming a substantial industry post the repeal of PASPA in 2018, there is a growing realization that state-level regulation is adequate and that federal taxes could hinder the industry’s progress and innovation.
By eliminating the excise tax, legal operators can potentially lower the tax burden they currently face and level the playing field against illegal operators. This move could lead to a more competitive market and help combat illegal activities in the gambling sector.
In conclusion, the proposed repeal of the federal excise tax on sports betting handle represents a significant step towards fostering a more vibrant and competitive legal gambling industry. The bipartisan efforts to eliminate this tax underscore a shared commitment to supporting local economies, creating jobs, and cracking down on illegal gambling activities. As the debate continues, the future of sports betting regulation and taxation in the United States remains a topic of ongoing interest and discussion.