AGA welcomes bill on sportsbooks tax relief
AGA’s president and CEO has commended legislation that would eliminate taxes on legal sportsbook operators and provide Covid-19 relief.
US.- American Gaming Association (AGA) President and CEO Bill Miller has welcomed bipartisan legislation put forward by congressional representatives Dina Titus (Nevada) and Guy Reschenthaler (Pennsylvania) to repeal federal excise and head taxes on sportsbooks.
The Internal Revenue Code current requires regulated sports betting operators to pay a 0.25 per cent federal excise tax on all wagers, plus aa $50 annual tax, or “head tax” for every employee involved in receiving bets. The taxes accounted for under $33 million in federal tax dollars in 2019.
Miller had encouraged Congress to repeal the excise tax in his testimony before the Senate Judiciary Committee last week, arguing that regulated businesses needed relief to help recover from the impact of Covid-19.
He welcomed the new bill saying: “The federal excise and head taxes levied on legal U.S. sportsbooks generate little meaningful revenue for the government. Instead, they place legitimate businesses at a significant competitive disadvantage against illicit gambling operations which skirt taxes and licensing fees. Though originally enacted in the 1950’s as a tool to curb illegal gambling, these antiquated federal taxes now give illegal operators a leg up.
“To absorb the unnecessary burden of these taxes, legal sportsbooks are forced to offer worse odds and payouts or reduce investment in promoting legal betting channels to the public. Furthermore, the head tax serves as an impediment to hiring at a time when providing jobs is critical.
“I’m grateful to the Congressional Gaming Caucus’ Co-Chairs Reps. Titus and Reschenthaler for introducing this legislation today to provide regulated operators with meaningful relief as they recover from the COVID-19 sports shutdown. Eliminating these taxes is a long overdue step to enable a legal, regulated environment for sports betting that will better protect customers and generate much-needed revenue for state and local economies.”
The AGA reminded lawmakers that sportsbooks operate with low margins even in the lowest-taxed jurisdictions. Nevada sportsbooks’ revenue is typically 5 per cent of the total amount wagered, before accounting for taxes and operator expenses, it said.
