Super Bowl Spotlights Why Trump Should Ditch Failed Sports Betting Ban

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Super Bowl

Why is the federal government stopping states from allowing legal sports betting?

States can offer lotteries, poker, blackjack, craps, slots, bingo, horse racing, and a near-endless list of other ways to gamble.

The feds don’t even blink an eye at the 45 or so states where Americans bet billions a year on fantasy sports contests.

So what is it exactly about betting on the final score of a game that justifies – logically, legally, or constitutionally – such onerous federal regulation?

Federal sports betting ban amounts to a tax hike

Many people don’t know that the federal government currently taxes sports betting.

There’s a .25 percent excise tax on “the amount of any wager authorized under the law of the state in which accepted,” a provision that applies to the handful of states – most notably Nevada – currently exempted from the federal sports betting ban.

The American Gaming Association estimates that $4.5 billion will be wagered illegally on Super Bowl 51. Make those wagers legal environment and you’ve generated $11.25 million in federal tax revenue in a single day via the excise tax.

States would also get significant revenue from legalized sports betting. Assuming a tax rate of 15% on sports books (on the low end of casino tax rates), states could collectively pocket up to $40.5 million in tax revenue on Super Bowl Sunday alone.

The combined annual tax impact would easily climb into the billions.

Bottom line: The federal government is creating an artificial deficit by denying states the ability to legalize sports betting, a deficit that is filled by taxes on income, property, and purchases.

Trump administration could create thousands of American jobs with repeal

Regulated online gambling in New Jersey supports hundreds of high-quality American jobs.

Many of these jobs simply cannot be shipped overseas. Some are required to be located in America by state gaming laws. Other positions just wouldn’t work if moved out of the country.

Similarly, regulated sports betting would support thousands of American jobs directly, and tens of thousands more indirectly.

Technological development, operations, marketing, and content are just a few examples of the high-skilled, high-paying, stable jobs that could spring from legal sports betting if the federal government would get out of the way.

And that’s to say nothing of the explosion of innovation and investment we’d see from sports betting startups and the flow of billions in economic activity to related industries like sports media.

Americans bet billions now, and we have no idea where the money goes

No one really knows how much Americans bet at offshore online sportsbooks. The AGA puts the number at around $150 billion.

Assuming a typical hold of about 6%, that means $9 billion is leaving the U.S. economy every year via illegal online sports betting.

So where does it go? That’s another thing no one really knows.

The majority of online sportsbooks that will take bets from Americans on Super Bowl 51 are effectively unregulated.

Those who are regulated often hold “licenses” in jurisdictions with highly-questionable track records. Law enforcement has repeatedly noted connections between illegal online sports betting and organized crime.

The federal sports betting ban not only forces American money out of the country, but potentially to individuals and organizations who may be actively working against American interests.


Lower taxes, more jobs, and less money leaving the country – obliterating the federal regulations stopping states from offering sports betting is an easy win for any administration.

It’s time for the Trump team to end this irrational ban and let states make the call that should have been theirs to make all along.