Nevada Senator Cortez Masto Introduces Bill to Remove Sports Betting Taxes

U.S. Senator Catherine Cortez Masto (D-Nevada) is sponsoring a bipartisan bill that would exempt legal sports betting from decades-old taxes in the Silver State. Tax relief for licensed operators is the main goal. Senator Cindy Hyde-Smith (R-Mississippi) also introduced the measure.

U.S. Sens. Catherine Cortez Masto, Cindy Hyde-Smith are proposing the Withdrawing Arduous Gaming Excise Rates (WAGER) Act

The Withdrawing Arduous Gaming Excise Rates (WAGER) Act would remove the federal excise or “handle” tax on legal sports bets. It will also eliminate the $50 annual “head” tax per employee for sports betting businesses.

According to records, the Internal Revenue Code (IRC) was established in 1951 to suppress illegal gambling. The IRC imposes a federal excise “handle” tax of 0.25% on all legal sports bets.

For that reason, gamblers have long argued that these taxes, which are intended to prosecute illegal betting operators, now put legal operators at a competitive disadvantage against illegal offshore sportsbooks.

The bill will amend the IRC of 1986 to exempt sports betting from the tax on authorized wagers.

“The federal sports betting excise tax was enacted more than 70 years ago as a tool to prosecute illegal sports betting operators. Illegal offshore bookmakers pay no federal or state taxes [and] offer no responsible gaming tools.

“[They] have no systems in place to prevent underage customers from using their platforms,” said Bill Miller, President and CEO of the American Gaming Association (AGA).

Nevada paid nearly $22 million in handle taxes in 2022, nearly double the 2019 total

Unregulated operators are able to run at cheaper costs while still offering accurate odds. Nevada paid nearly $22 million in handle taxes in 2022. That’s nearly double the total from 2019, according to Cortez Masto’s office.

The state collected more than $50 million in revenue from the taxes in January 2023.

“Nevada is home to multiple championship-level sports teams, and we know better than anyone that responsible, legal sports betting can be a great revenue source for our local economy,” Cortez Masto said in a statement.

“My bipartisan legislation will ensure our sports gaming industry can provide essential tax relief to consumers and our sports gaming industry, creating more jobs and keeping our tax money in the state while cracking down on illegal activities.”

Officials from Sen. Cortez Masto’s office said the WAGER Act exempts legal sports betting from this tax. However, it will also maintain laws to continue to crack down on illegal operations.

Gamblers are more likely to suffer from problem gambling using offshore sportsbooks. Signs include borrowing money to pay off debt, neglecting family to gamble, and missing time from work to gamble.

According to the Nevada Council on Problem Gambling (NCPG), up to 6% of residents suffer from compulsive gambling. Problem gamblers can no longer control their gambling.