NV Tries To Lift Required Federal Excise Tax For Sports Betting

• Nevada congresswoman Dina Titus is looking to get rid of the required 0.25% excise tax on sports betting handle in the United States.
• The IRS collects millions of dollars from every state with a regulated sports wagering industry each year through this tax that was made a law in 1951.
• Titus will go before the United States Congress later this year to propose legislation that would lift this tax requirement indefinitely.

CARSON CITY, Nev. – A federal excise tax on sports betting has been in place since 1951 and Representative Dina Titus (D-NV-1) of Nevada is continuing in her efforts to get this requirement lifted.

In the last few sessions since the repeal of PASPA in 2018, Titus has pushed to rid the industry of this tax because she sees it as antiquated and was enacted during a time before sports betting became the ever-growing and extremely popular national market that it is today.

What Is This Excise Tax & What Is Titus’ Argument?

The Revenue Act of 1951 puts a handle tax also known as an excise tax of 0.25% on all wagers taken at any operating sportsbook in the U.S. The amount of money that the U.S. government is collecting with this tax is much more than could’ve ever been imagined when the proposal was first drawn up. In today’s market, sports bettors across the country are betting well over $20 billion a year on sporting events, all of which are subject to the excise tax.

As more and more states regulate sports gaming, the profits from this tax grow with the market. In 2021, Nevada, along with four other states needed to fork over a minimum of $4 million to the IRS because that’s what their 0.25% tax added up to. On Tuesday, Titus spoke in front of the U.S. House of Representatives Ways and Means Committee to discuss the reasons why this tax should be repealed.

A huge argument for the congresswoman was the Coronavirus Pandemic and how it’s affected the gaming industry. Operators have lost extreme amounts of money in 2020 and thousands of people have lost their jobs because these sportsbooks have had to let employees go because it was too costly to keep them on the payroll. Having to pay this tax only furthers the money lost to these companies for an already abysmal 2020 fiscal year. Titus also went back to reasonings from her last presentation on the subject in July.

“Sports are back,” said Titus. “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.”

Something else that leaves Titus to push for this repeal is the fact that when questioned, the IRS has no answers on how they use the money received through this excise tax. Prior to the outbreak of COVID-19, Nevada alone owed the IRS $13.3 million with this tax in 2019. Originally, the excise tax was put into place in 1951 to stop illegal sports wagering from taking place in states. However, with the regulation of sportsbooks in more than half of the nation, this is no longer an issue making the law outdated and not synchronized to the 2021 world of sports betting.

What’s To Come?

There is no telling whether or not Titus will be successful in her 2021 bout with the U.S. Congress in trying to rid the sports betting market of the excise tax. Opponents of the excise tax argue that it doesn’t work in today’s world but with the amount of money that the U.S government is receiving from sports betting revenue, it will be an uphill battle to rid the industry of this law.

However, Titus has plans to go before Congress again to reintroduce legislation to repeal this requirement sometime this year while Congress is in session and there is no doubt sportsbook operators are in her corner for this to pass.

News tags: Coronavirus | Dina Titus | IRS | Nevada | PASPA | The Revenue Act of 1951 | U.S. House of Representatives Ways and Means Committee | United States Congress