Amid the general diffusion of legal sports betting in almost half of the states, the US Congress is all set to debate eliminating the excise tax on the industry.
A rare bipartisan bill will be put before the Congress with the hopes of eliminating the excise tax on sports betting operators. The bill that has been penned by the co-chairs of the Congressional Gaming Caucus, that taxes are counter-productive.
Bill is Getting Its Significant Support
It is a rare occasion to have reached consensual support in a country where both parties are divided on almost every matter. However, this bill has reached rare bipartisan support.
More excitingly, the support has not come from inside the legislature, as the CEO of the American Gaming Association Bill Miller has stated that this bill might go far beyond in providing the much-need relief from the financial downturn, thanks to the pandemic.
Mill also argues that the bill will reduce legal sports betting trends by facilitating the betting environment for legal sportsbooks to operate without a federal tax.
Particularly, the bill seems to appeal the handle tax that is placed on each legal sports bet within the US. Guy Reschenthaler (R-Pennsylvania) and Dina Titus (D-Nevada) are the co-chairpersons of the Congressional Gaming Caucus, and the persons who have led this effort.
The Tax Adds Up Real Fast
For now, the handle tax is set at 0.25%, which goes to the federal pocket. It is placed on all the legal sports betting operators in the US, no matter what state they are in and what the state laws and taxes are set at.
To cite how much this excise tax could amount to, the previous year, the legal sportsbooks in Nevada paid over $13 million to the federal government. Obviously, this is the biggest amount of all the states, as Nevada is the leader of the betting industry in the country.
Moreover, sports bets via state lotteries and horse betting are absolved from this tax. However, those not absolved also have to pay a $50 tax for each employee who works for the legal sportsbook. It is in addition to the excise tax, meaning that the total amount paid continues to increase.
Co-author of the bill, Rep. Dina Titus, reasoned why this tax should be banished:
“Unfortunately, the penalty on making legal bets never left. The handle tax makes it harder for legal gaming establishments to compete with illegal operators. Its banishment will push more consumers out of the black market and into a well-regulated market.”
Titus further said that making these legal sportsbooks to also pay a per-employee tax could take things too far. According to her, it is a “poor timing” when so many of these places are already dealing with layoffs.
There appears to be a huge support to strike down the excise tax and allow the sports betting market to prosper in the US. Congress also seems to provide some relief to the gambling industry that is already contributing to the state budgets of around two dozen states.