Controversy Erupts Over Federal Handling of Tax Bill in Industry

The federal excise tax on sports wagers, implemented in the 1950s to combat illegal gambling, has remained in place despite opposition from lawmakers. The tax, which amounts to 0.0025% of every sports wager, was originally only applicable in Nevada but now affects the entire country.

A new bill introduced by Sen. Richard Blumenthal and Rep. Andrea Salinas seeks to utilize the funds raised from this tax to create a new initiative focused on researching, treating, and preventing gambling addiction. The proposed “Gambling Addiction, Recovery, Investment, and Treatment Act” would allocate 50% of the tax revenue, also known as the handle tax, to fund this effort.

In a joint statement, Salinas and Blumenthal emphasized the importance of dedicating more resources to addressing gambling addiction, especially with the increasing legalization of sports and online betting. They highlighted the prevalence of gambling addiction as a result of the convenience and accessibility of betting from mobile devices.

The National Council on Problem Gambling (NCPG) supports the proposed bill, along with problem gambling councils in Connecticut and Oregon. However, not everyone agrees with the proposed handle tax bill. Rep. Dina Titus, a long-term opponent of the tax, argued that states with legalized sports betting already allocate resources to combat problem gambling and therefore, the federal excise tax is redundant.

Chris Cylke, the American Gaming Association’s senior vice president, echoed Titus’ sentiments, stating that casino gaming taxes, including those from legal sports betting and online gambling, already contribute to problem gambling services. Cylke also expressed concerns that the federal excise tax puts licensed operators at a disadvantage compared to illegal gambling operators who do not pay fees or taxes.

The debate over the proposed handle tax bill reflects the ongoing challenges of regulating and funding initiatives to address gambling addiction in the context of evolving gambling laws and practices.