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Congressional bill aims to scrap 0.25% federal handle tax


Representatives and congressional Gaming Caucus co-chairs Dina Titus and Guy Reschenthaler have introduced a federal bill – HR7790 – to repeal the US’s 0.25% excise tax on sports wagering handle.

The tax was introduced in 1951 and does not apply to horse racing or sports betting operated by state lotteries, while operators eligible for the tax must also pay a $50-per-head employee tax. The tax raised $13.1m from Nevada alone in 2019 but Titus – of Nevada’s first district – said the Internal Revenue Service (IRS) “couldn’t answer how the money was being used”.

Titus said the return of sports was the perfect time to address the tax, which she said only served  to penalize legal operators, and not illegal competitors.

 “Sports are back,” Titus said. “Unfortunately, the penalty on making legal sports bets never left. The handle tax makes it more difficult for legal gaming establishments to compete with illegal operators. 

“Repealing it will push more consumers out of the black market and into a well-regulated market. Forcing sportsbooks to pay a per-employee tax is the last thing we need when gaming establishments are still making announcements about new rounds of layoffs and furloughs.” 

American Gaming Association (AGA) President and chief executive Bill Miller echoed this sentiment. Last week, the AGA published new research which found that over half of consumers who wagered with unlicensed operators in the US did not know they had gambled illegally.

“The federal excise and head taxes levied on legal US sportsbooks generate little meaningful revenue for the government,” Miller said. “Instead, they place legitimate businesses at a significant competitive disadvantage against illicit gambling operations which skirt taxes and licensing fees. 

“Though originally enacted in the 1950’s as a tool to curb illegal gambling, these antiquated federal taxes now give illegal operators a leg up.”

Reschenthaler – of Pennsylvania’s 14th district – said the bill would help to protect jobs at a time when many are at threat. Last week, the Circus Circus and Tropicana casinos in Las Vegas announced that they would make a combined 872 layoffs between now and October.

“I’m proud to join my Gaming Caucus co-chair Representative Dina Titus to introduce this important legislation that will eliminate an outdated tax and burdensome requirements on the gaming industry,” Reschenthaler said. “At a time when so many employees in the industry are struggling, this bill ends the counterproductive practice of penalizing employers for creating jobs by eliminating a per employee tax. 

“Gaming is a vital economic driver in Pennsylvania, supporting over 33,000 jobs, and this legislation will help pave the way for economic growth and job creation in my district and throughout the nation.”

The bill has been referred to the House Ways and Means Committee.

Last week, the US Senate Committee on the judiciary heard evidence both for and against the continued legality of betting on college sports in a committee meeting titled “Protecting the Integrity of College Athletics”.