The American Gaming Association (AGA) has released a statement regarding the bipartisan legislation introduced on July 31 by Senator Catherine Cortez Masto and Senator Cindy Hyde-Smith that would repeal the federal sports betting excise tax on legal operators.
AGA President and CEO Bill Miller spoke on the disadvantage the tax currently puts towards legal operators, having said, “The federal sports betting excise tax was enacted more than 70 years ago as a tool to prosecute illegal sports betting operators.
“Today, with sports betting legal in 38 states and Washington DC, this antiquated tax puts legal operators at a competitive disadvantage and rewards illegal offshore bookmakers that pay no federal or state taxes, offer no responsible gaming tools and have no systems in place to prevent underage customers from using their platforms.”
The Internal Revenue Code currently imposes a federal excise tax of 0.25% on the amount of any legal sports wager, as well as an additional $50 annual head tax for every employee engaged in receiving wagers for or on behalf of any legal sports betting operator.
This tax is applied to the amount wagered and not the revenue, unlike any other excise tax. The $50 head tax on each sportsbook employee further discourages job creation according to the AGA.
"The AGA is grateful to Senators Cortez Masto and Hyde-Smith for their commitment to providing a safe, responsible sports betting market and to continuing to help migrate bettors out of the illegal market, which is bereft of consumer protections and a haven for bad actors and tax evaders,” Miller said.
“The AGA will continue to work with policymakers to enact legislation to address this harmful tax.”
Established in 1951, the excise tax was said to never be intended as a revenue source, but rather a tool for prosecuting illegal bookmaking operations that did not pay the tax.
