The GRIT Act would establish a federal program to help states address gambling addiction.
US Senator Richard Blumenthal and US Representative Andrea Salinas introduced the Gambling addiction Recovery, Investment, and Treatment (GRIT) Act on Thursday. The bill would be the first to dedicate federal funds for the treatment and research of gambling addiction.
Research conducted by the National Council of Problem Gaming (NCPG) indicates that the risk of gambling addiction rose 30 percent between 2018 and 2021. Much of that growth can be explained by the expansion of legalized gambling across the US, following the removal of the ban on sports betting.
The GRIT Act wouldn’t require additional funding or taxes. It would earmark a portion of the existing federal sports betting excise tax for gambling addiction treatment and research. The new program would be administered by the US Department of Health and Human Services. The majority – 75 percent – of the funds would flow back to the states as grants for prevention and treatment. And the remaining 25 percent would go to the National Institute of Drug Abuse for research grants dedicated to gambling addiction.
The current federal tax is 0.25% of the handle – or the amount wagered. While that was an inconsequential amount in the past, the growth of legalized gambling now generates roughly $250 million in tax revenue. The GRIT Act would seek to apply half the excise tax to fund the bill’s associated programs.
The legislation mandates a report to Congress on the program’s effectiveness within three years of its passage. The bill would authorize spending for ten years.
American Gaming Association Not a Fan
The American Gaming Association (AGA) opposes the new legislation. Like most industry associations, the AGA would prefer less governmental intrusion, no matter how well-intentioned.
The AGA’s objection, however, is more than just a desire to reduce government intervention. For years, the AGA has lobbied to eliminate the federal sports betting excise tax. Basically, the AGA wants to reduce the taxes paid by its industry.
AGA Senior VP of Government Relations Chris Cylke provided this statement: “Congress enacted the federal sports betting excise tax in the 1950s as a tool to prosecute illegal gambling operations. Today, this antiquated policy puts the nascent legal market at a competitive disadvantage against offshore illegal operators, who do not pay any taxes and prey on vulnerable customers.”
While almost every state with legalized sports betting dedicates some portion of its taxes to responsible gaming, the result is a patchwork of relatively untested programs with varying degrees of oversight. A federal program, that provides research and treatment programs, could improve both the effectiveness and cost of state-responsible gaming programs.
