A new bill aims at eliminating the federal excise tax under which sports betting operators need to pay $50 annually per employee and a 0.25% tax on sports bets. The proposal was put forward by Representatives Dina Titus and Guy Reschenthaler.

New Bill Aims to Eliminate the Sports Betting Excise Tax

Introduced in the 1950s, the federal excise tax applies a 0.25% tax on sports bets. Furthermore, the tax forces each sportsbook to pay $50 per employee annually. Although some businesses are exempt from the excise tax, many legal operators are still paying it. The main purpose of the tax which is also known as handle tax was to fight illegal gambling operations.

Now, thanks to a new proposal put forward in Congress on Thursday this week, the outdated handle tax may soon be eliminated. A bipartisan bill was put forward by Representatives Dina Titus (NV-1) and Guy Reschenthaler (PA-14) aims to repeal the excise tax on legal sports bets. Although similar bill proposing the removal of the excise tax failed last year, this year, the two lawmakers may finish what they started.

Handle Tax Punishes Legal Gaming Operators

Some $13.3 million in handle tax was paid in Nevada by gaming operators in 2019. This was the most handle tax paid out of any other state. However, when Titus asked the federal government how was that money spent, the “IRS couldn’t answer how the money was being used“.

“The handle tax punishes legal gaming operators and encourages consumers to place bets illegally.”

Representative Dina Titus

Now, Titus said that the antique tax may push some consumers to the illegal market. Furthermore, she acknowledged that more states are legalizing and regulating sports wagering. Thus, repealing the tax will help the creation of jobs not only in Nevada but across the country, added Titus.

Representative Titus acknowledged that the unemployment rate in Las Vegas is the second-highest of any large metro area in the country. Consequently, forcing sportsbooks to pay tax on each employee would make it harder for economic recovery. In conclusion, she said that she is looking forward to working with Congressman Reschenthaler to make the bill a law.

AGA Supports the Proposal for Excise Tax Repeal

Congressman Reschenthaler said that the gaming sector in Pennsylvania supports 33,000 jobs and has a $6.34 billion economic impact. He acknowledged that the outdated tax and burdensome regulations are acting as a penalty for the licensed regulated operators. Furthermore, Reschenthaler stressed that this gives illegal operators “an unfair advantage“.

According to him, the proposal is going to boost the recovery of the industry, which has felt the hard hit by COVID-19. Furthermore, he added that with the help of the bill, good-paying jobs and economic growth in southwestern Pennsylvania and across the country is going to be boosted.

“I’m grateful to Congressional Gaming Caucus Co-Chairs Reps. Titus and Reschenthaler for introducing this much-needed legislation that will continue fostering growth for the legal market and better protect customers.”

Bill Miller, president and CEO, American Gaming Association

In a statement, Bill Miller, CEO and president of the American Gaming Association (AGA) showed support for the proposal of Reschenthaler and Titus. He stressed that the original purpose of the excise tax was to punish illegal operators. However, now, it helps the offshore, illegal operators, added Miller. Furthermore, he said that if Congress wants to boost the success of the legal sports betting market, it needs to eliminate the “unnecessarily burdensome tax”.