A pair of U.S. senators are again trying to eliminate the federal excise tax on sports betting handle, a levy that industry groups have long criticized as outdated and counterproductive.
Sens. Catherine Cortez Masto (D-NV) and Cindy Hyde-Smith (R-MS) on Friday introduced the Withdrawing Arduous Gaming Excise Rates Act, which would exempt legal sportsbooks from paying the 0.25% handle tax on each wager taken, along with the $50 annual per-employee fee.
Legislation to repeal the excise tax has surfaced repeatedly in both chambers of Congress but has never advanced, despite some bipartisan support. Cortez Masto and Hyde-Smith filed a similar bill in 2024, before Reps. Dina Titus (D-Nev.) and Guy Reschenthaler (R-Pa.) reintroduced their companion measure earlier this year.
‘Past time to exempt legal sports betting’
The tax, first enacted in 1951 to help federal officials crack down on illegal bookmaking, has become a growing source of friction as legal sports betting expands. Industry advocates argue the levy punishes regulated operators while giving offshore sportsbooks and local bookies a competitive edge.
“In Nevada, legal sports betting is a thriving industry that adds to the world-class experience of watching our championship-level professional sports teams,” Cortez Masto said in a release. “It’s past time to exempt legal sports betting from outdated taxes that are actually incentivizing illegal sportsbooks.”
Hyde-Smith framed the issue in terms of her state’s casino economy.
“For too long, this outdated federal tax on sports betting has held this industry back, all while giving illegal offshore operators, and now new out-of-state run prediction markets, an unfair edge against our more traditional casinos in Mississippi and elsewhere.”
25 cents per bet adds up
While the tax amounts to just 25 cents on a $100 bet, the scale of the U.S. sports betting market means the total is significant.
Nevada sportsbooks alone paid nearly $22 million in handle taxes in 2022, almost double their contribution from 2019, according to Cortez Masto’s office. Nationally, operators have paid more than $500 million in excise taxes since the Supreme Court repealed PASPA in 2018.
Some lawmakers have instead proposed putting the funds to use rather than eliminating them. Earlier this year, Rep. Andrea Salinas (D-OR) and Sen. Richard Blumenthal (D-CT) reintroduced the GRIT Act, which would dedicate excise tax revenue to problem gambling treatment and research.
