It’s The Right Time To Repeal Federal Sports Betting Tax, Says Bill Sponsor

Posted on July 29, 2020

Opposition to the federal sports betting excise tax is nothing new for Rep. Guy Reschenthaler.

But now is finally the right time to end the levy that makes operators pay 0.25% of all handle to the US government, he said.

“I’m particularly motivated to do away with it now since the industry’s been hit so hard because of COVID-19,” Reschenthaler told LSR.

Reschenthaler and Congressional Gaming Caucus Co-Chair Dina Titus submitted HR 7790, which calls for the end of the tax. It would also end the $50 per head annual fee sports betting operators pay for employees that can accept wagers.

Taking money out of the government’s pocket isn’t the easiest thing to accomplish. But Reschenthaler expects just that with him, a Republican, and Democrat Titus pushing the bill in their respective parties.

“I actually really do think it has a chance to pass,” Reschenthaler said.

Sports betting tax weakens competitiveness of legal books

Reschenthaler said he’s been fighting for the gaming industry since he served at the state level in Pennsylvania. He helped pen the state’s massive gaming expansion bill, which led to legal sports betting in Pennsylvania.

Now, at the federal level, he wants to make sure all sportsbooks have a fair chance. Imposing additional taxes on licensed operators means unlicensed operators could offer lines at better prices.

“We have got to reduce the regulatory burden and the tax burden on sports betting,” Reschenthaler said. “If we don’t, you’re going to see sports betting go offshore or it’ll stay in the pockets of illegal venues. … The whole point of making this legal was so we could tax it, regulate it, bring it out of the shadows, have parameters put on it. We defeat the purpose of doing that when we tax it and regulate it back into the shadows.”

According to the American Gaming Association, the federal excise tax brought in less than $33 million for the US government in 2019. Titus previously tried to track down where those funds went in 2014 but couldn’t find an answer.

Two prior attempts to end the tax by Titus have failed. Bill Miller, CEO of the AGA, also called for the end of the tax at last week’s Senate Judiciary Committee hearing.

Wants to end tax ASAP

Reschenthaler doesn’t want to waste any additional time.

“I want to do this [repeal the tax] as soon as possible,” he said.

Reschenthaler said he intends to speak to Titus about potentially amending a bill to include this legislation. It’s less about seeing legislation pass with his name on it and more about seeing the tax end, he added.

He’s not interested in seeing the funds earmarked for other issues, either, such as fighting the illegal industry.

“My goal is to get rid of it,” Reschenthaler said. “We’ve got to get rid of it to make sports betting profitable so it stays in a legal space in the United States.”

Gaming Caucus focused on health of industry

Reschenthaler called co-chairing the re-launched Congressional Gaming Congress an honor. He’s looking forward to fighting for the gaming industry at the Congressional level, but that’s not the main job right now.

Currently, the main priority is ensuring the industry’s health.

“The biggest focus is how we can help the gaming industry recover from COVID-19,” Reschenthaler said. “The gaming industry has been hit incredibly hard and that’s a problem. We’ve got to make sure the gaming industry can bounce back from COVID because, at the end of the day, it’s about jobs. If the gaming industry is hurt, then our job numbers are hurt.”

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Matthew Waters

Matthew Waters is a reporter covering legal sports betting and the gambling industry. Previous stops include Fantini Research and various freelance jobs covering professional and amateur sports in Delaware and the Philadelphia area.

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