U.S. Senators have taken a significant step towards changing the financial landscape of legal sports betting. In a move aimed at boosting the economy and making American sportsbooks more competitive, Senators Catherine Cortez Masto, D-Nev., and Cindy Hyde-Smith, R-Miss., have introduced a bill that seeks to eliminate certain taxes on legal sports betting operations. As reported by News 3 Las Vegas, the bipartisan measure, coined the WAGER Act, would withdraw both the federal excise tax on sports bets and the $50 per employee annual tax imposed on sports betting businesses.
The current federal excise tax, also known as the "handle" tax, is particularly burdensome, amounting to 0.25 percent per wager. This tax initially served to combat illegal gambling activities when it was introduced in 1951, but with the post-2018 landscape following the Supreme Court's decision to overturn the Professional and Amateur Sports Protection Act, the scenario has dramatically shifted. Originally affecting only Nevada sportsbooks, the excise tax now spans across the nation where sports betting is legal – including 37 states and Washington D.C. Advocates for the WAGER Act reason that legal sportsbooks could more effectively compete against illegal operators and offer better odds if freed from this tax burden, as highlighted in a Las Vegas Review-Journal report.
According to Senator Cortez Masto, the legislation is much more than a financial reprieve, it is a means for nurturing local economies, generating jobs, and ensuring the retention of tax revenue within the states. "Nevada is home to multiple championship-level sports teams, and we know better than anyone that responsible, legal sports betting can be a great revenue source for our local economy," Cortez Masto told News 3 Las Vegas. The effort appears to dualistically target both economic growth and the stifling of unlawful betting activities that have historically plagued the industry.
Co-sponsor Senator Hyde-Smith shared her own sentiments, emphasizing the bill's potential to support her constituents in Mississippi. "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," Hyde-Smith remarked to the Las Vegas Review-Journal. Similar legislation in the House of Representatives, introduced by U.S. Rep. Dina Titus, D-Nevada, further reinforces the bipartisan initiative to amend the economic dynamics of sports betting across the United States. Their collective stance suggests a unified belief that these changes are overdue, and aims to conclusively put an end to the "outdated" tax's impact on America's legal betting operators.
