As legal US sports betting continues to grow, national legislators are looking to help curb problem gambling with a new bill introduced in Congress this week.
On Thursday, US Sen. Richard Blumenthal (D-CT) and US Rep. Andrea Salinas (D-OR) introduced the Gambling Addiction and Recovery, Investment and Treatment Act, or GRIT, using US sports betting tax revenue. The sports betting legislation would establish the first federal funding mechanism to treat, prevent and research gambling addiction.
“The growing legalization of sports and online betting, paired with the ability to place bets from your phone whenever you want have created a perfect storm for gambling addiction,” Blumenthal said in a release.
“Dedicated federal resources to tackle problem gambling head-on will provide much-needed support, resources, and treatment for those suffering from gambling addiction. As the number of Americans who are suffering from gambling addiction surges, legislation like the GRIT Act is needed now more than ever.”
How would GRIT play into US sports betting?
Gambling addiction results in a social cost of $7 billion annually in the US, according to the release. GRIT would designate existing federal sports betting excise tax funds toward research and treatment.
“Gambling addictions are hurting countless families, children, and communities in Oregon and across America. Yet unlike alcohol and drug addictions, there are currently no federal funds devoted solely to helping stop problem gambling,” Salinas said in the release. “Our legislation will deliver much-needed resources to states and nonprofits, promoting new research and ensuring more people can get into treatment and recovery. This is a commonsense solution, and I urge my colleagues to join us in supporting it.”
The proposal sends funds to support state health agencies and nonprofits while progressing responsible gambling research at a national level, according to the release.
GRIT US sports betting breakdown
GRIT would set aside 50% of federal sports betting tax revenue for gambling addiction treatment and research. Of that money, 75% would go to state-level programs.
“State health agencies and nonprofits should not have to address gambling problems on our own,” Oregon Council on Problem Gambling Executive Director Gina Parziale said. “As the Federal Government accepts gambling as a source of income, it has a duty-of-care to its citizens to take measures to minimize gambling-related harm.”
The other 25% would go to the National Institute of Drug Abuse to fund grants for gambling addiction research. It also would require the Secretary of Health and Human Services to submit a report to Congress on the program’s effectiveness within three years of passage.
How much is federal excise tax?
The US government taxes sports betting handle at 0.25% across all markets. Sportsbook operators have paid more than $500 million in federal excise tax since the end of PASPA in 2018. In 2022 alone, operators paid more than $235 million.
While the federal government collects an excise tax on sports betting now, that could change. There have been multiple legislative attempts to end the tax. Last year, two US representatives sponsored a bill to abolish the tax, as well as in 2020 and 2021.
One of the advocates to eliminate the tax, Rep. Dina Titus (D-NV), told the Nevada Independent the GRIT proposal “would exacerbate already destructive tax policies that put the legal gaming industry at a disadvantage to illegal offshore operations.”
Problem gambling on the rise
The NCPG research found gambling addiction risk rose 30% between 2018 and 2021.
The $7 billion estimated social cost includes criminal justice and healthcare costs, according to the NCPG. It also counts job loss and bankruptcies.
“The introduction of the GRIT Act is a testament to our shared commitment to mitigating gambling-related harm and addressing the challenges of gambling addiction,” NCPG Executive Director Keith Whyte said in a release. “This landmark legislation sets the stage to significantly bolster gambling addiction prevention, research, and treatment resources and make a positive lasting impact on individuals and communities nationwide.”
Blumenthal eyes gaming
Blumenthal’s hope to fund problem gambling support is not his first foray into sports betting.
Last year, the Connecticut lawmaker renewed his call to end collegiate sports betting partnerships.
Shortly after Blumenthal’s added attention to the partnerships, multiple operators ended deals with colleges. That included PointsBet and the University of Colorado and Caesars with Michigan State University.
