Gambling industry opposes law imposing excise tax on sports betting
The leading commercial gambling trade group opposes federal legislation that would use the U.S. government’s 0.25% sports betting excise tax to research and treat problem gambling.
U.S. Senator Richard Blumenthal (D-Conn.) and Representative Andrea Salinas (D-Ore.) introduced the Gambling Addiction, Recovery, Investment and Treatment Act last week. That is the GRIT Act.
The bill proposes to direct half of the excise tax collected from sports betting to the Substance Abuse Prevention and Treatment Block Grant and the National Institute on Drug Abuse. These funds are used for a variety of programs aimed at minimizing the harm of problem gambling.
The American Gaming Association (AGA) rejected Blumenthal and Salinas' proposal. For years, the casino lobby has called on Congress to repeal the sports betting tax, which was introduced in 1951 to crack down on illegal bookmakers.
Unintended Consequences
The AGA said the excise tax makes it harder for legal sports betting operators in nearly 40 states to compete with offshore, unregulated online betting platforms that don’t pay the tax.
“Congress established the federal excise tax on sports betting in the 1950s as a tool to prosecute illegal gambling activity. Today, this outdated policy leaves an emerging legal market in the face of illegal offshore operations that fail to pay taxes and exploit vulnerable customers. Businesses are at a competitive disadvantage," said Chris Cylke, AGA's vice president of government relations.
AGA opposes the GRIT Act and will continue to educate Congress on why bipartisan legislation to eliminate the excise tax on legal sports betting operators is necessary to ensure we can effectively transition Americans to the protections of a regulated market. ” Selke added.
U.S. Rep. Deena Titus (D-Nev.) is co-chair of the House Congressional Gaming Caucus. Titus introduced legislation last year with her Gambling Caucus co-chair Rep. Guy Reschenthaler, R-Pa., to eliminate federal taxes on sports betting.
Titus also opposes the GRIT Act. She said sports betting and casino taxes already fund research on problem gambling, making the federal bill "redundant."
More funds needed
Blumenthal and Salinas said state health departments and problem gambling organizations remain severely underfunded as the gambling industry continues to expand. In 1999, only eight states had commercial casinos. Today, 35 states have slot machines.
Commercial gaming revenue reaches $60.4 billion in 2022, surpassing the record of $53 billion set in 2021,” the AGA’s 2023 State of the State report states.
Commercial gambling contributed nearly $13.5 billion in gambling taxes to state and local governments in 2022. Taxes for 2022 are up more than 15% over 2021.
While most commercial gambling states do require licensed operators to fund problem gambling research and programs, special tax incentives typically represent only a small portion of the total gambling tax bill. In New Jersey, for example, casino taxes primarily benefit seniors.
The state's casino control law requires each licensed casino to pay $500,000 annually to the New Jersey Compulsive Gambling Commission and $100,000 for a compulsive Gambling Treatment Program. Each iGaming licensee must donate $250,000 per year to the Compulsory Gambling Commission.
Nonprofit organizations speak out
Keith Whyte, executive director of the National Council on Problem Gambling, a Massachusetts-based nonprofit that neither opposes nor supports further expansion of gambling, said the GRIT bill would allow Make additional investments in research, prevention and treatment of gambling addiction.
Despite the prevalence of gambling addiction in the United States, there is no federal agency responsible for combating gambling addiction and no federal funds are earmarked for treatment or research," White said.
The federal sports betting excise tax credit increases from $38.7 million in fiscal year 2020 to $110 in fiscal 2021 to $7 million in fiscal 2021. The money currently goes into the U.S. Treasury's General Fund.
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Source: www.casino.org
