Congressional representatives Dina Titus (D-Nevada) and Guy Reschentaler (R-Pennsylvania) have introduced a bill that aims to eliminate the 0.25% federal tax on the total yearly U.S. sports betting handle.
Titus (pictured) and Reschentaler represent two states with large gambling businesses. They believe that the federal tax is one of many costs putting regulated sportsbooks at a disadvantage against illegal offshore bookmakers.
The tax was enacted in 1951, a time when only Nevada had legal sports betting. Since 2019 and the spread of legalization – now at 38 states – the amount of money taken by that tax has stacked up considerably. The tax also includes a $50 per-head monthly tax on retail sports betting employees.
Because of the high state taxes, as much as 30% to 50% in some states, and the added federal tax — plus the cost of administering it all — many smaller sportsbooks have recently found it prohibitively expensive to operate in the U.S.
The argument also says high taxes effect larger sportsbooks. That’s because they can’t offer competitive rewards, bonuses, and odds as do their illegal counterparts, which pay zero taxes.
The bill is the pair’s fourth attempt to repeal the tax in recent years. Titus also supports raising the minimum level of the federal tax on large jackpot gambling wins, which she has also unsuccessfully proposed several times.
The Proposal
Titus and Reschantaler filed The Discriminatory Gaming Tax Repeal Act in Congress this week. They say the outdated measure, originally introduced to enable prosecution of illegal sportsbooks on tax avoidance grounds, is a burden on regulated sportsbooks that are a wider economic benefit.
“Titus said she once asked the IRS officials where the revenue from the handle tax went in the federal budget, and they didn’t know,” said a press release from the Representative’s office.
“It makes no sense to give the illegal market an edge over legal sportsbooks with a tax the federal government doesn’t even track.”
As well as eliminating the tax, the pair have also proposed a second bill to repurpose half of the money that would go on the tax. The Gambling Addiction Recovery, Investment and Treatment Act (or GRIT) aims to ask sportsbooks to contribute half of the saved tax money to a voluntary fund researching and treating problem gambling.
The Chances
The measure has failed to pass either branch of Congress over the past four years it has been proposed. However, given the fast-moving new administration of President Donald Trump, it is possible attitudes may have changed.
Although Titus has been and continues to be a vocal critic of Trump, she could find some common ground with his cost-cutting efforts in this regard. The President has promised to cut all sorts of taxes, including those on tips, which has been widely supported by service workers in Nevada and specifically Las Vegas.
Shelving a tax that is outdated and difficult to account for also fits the stated mission of the controversial new Department of Governmental Efficiency (DOGE), headed up by the world’s richest man, Elon Musk.
David is an online casino expert who specializes in online slots and boasts over 10 years experience writing about iGaming. He has written for a wide range of notable publications, including eSports Insider and WordPlay Magazine.
David graduated Derby University with a BA Degree in English Literature and Creative Writing.
