A bipartisan effort to eliminate a federal excise tax on sports wagers received renewed support from Senators Catherine Cortez Masto and Cindy Hyde-Smith. The tax, established in 1951 and known as the handle tax, imposes a 0.25 percent fee on legal sports bets, in addition to a $50 annual head tax per sportsbook employee. This tax is unique in that it is applied to wagers themselves, not the revenue generated.
Cortez Masto emphasized that repealing this tax would provide tax relief to consumers and the sports gaming industry, leading to job creation and increased revenue retention within the state. The American Gaming Association has backed efforts to repeal the tax, citing the advantages it provides to illegal offshore bookmakers.
While Nevada was the sole state with legalized sports betting when the tax was enacted, the landscape has since evolved, with sports wagering now legal in 38 states and Washington, D.C. The Nevada Gaming Control Board reported significant revenue from legal sports betting in the state, further highlighting the economic impact of the industry.
In response to the Senate legislation, Rep. Dina Titus, along with Rep. Guy Reschenthaler, reiterated their support for repealing the handle tax. Titus expressed frustration over the lack of transparency regarding the use of revenue generated from the tax, emphasizing the need to eliminate an outdated policy that hinders the growth of legitimate sportsbooks.
Efforts to repeal the handle tax have gained momentum with bipartisan support in both houses of Congress. The push to end this tax is seen as a crucial step in leveling the playing field for legal gaming operators and ensuring that sportsbooks are not unfairly penalized for their contributions to job creation and revenue generation.
As the sports betting industry continues to expand nationwide, the elimination of the handle tax could have far-reaching implications for the economic viability of legal sports wagering. By removing this barrier, lawmakers aim to foster a more competitive and transparent gaming environment that benefits both consumers and industry stakeholders.