American lawmakers are again seeking to eliminate the federal excise tax on sports wagering, more popularly known as the "handle tax."
Representatives Dina Titus of Nevada and Guy Reschenthaler of Pennsylvania have introduced new legislation to repeal this tax.
This is the fourth attempt that Congressional Gaming Caucus co-chairs Rep. Titus and Rep. Reschenthaler have made efforts to eliminate it. Just as they have already attempted, in 2019, 2021, and 2023, the lawmakers say that the 1950s-era tax places lawful sportsbooks at an unfair disadvantage compared to illicit wagering businesses.
The tax mandates licensed sports betting operators pay a 0.25% tax on the gross amount bet. There is also a $50 tax per year for each employee working in a sportsbook. Currently, 38 states and Washington, D.C., have legalized some form of sports betting.
Rep. Titus and Rep. Reschenthaler explain that the legal and economic landscape has changed significantly since the Supreme Court invalidated the Professional and Amateur Sports Protection Act of 1992 (PASPA) in 2018. It has also changed dramatically since its implementation 70 years ago to combat all illegal betting.
In a post on X, Rep. Titus said, “I reintroduced legislation to eliminate the outdated tax on legal sports betting. The tax was implemented in 1951 to help prosecute illegal bookies who did not pay taxes. Today it only helps illegal operators attract more customers.”
I reintroduced legislation to eliminate the outdated tax on legal sports betting. The tax was put in place in 1951 to help prosecute illegal bookies who did not pay taxes. Today it only helps illegal operators attract more customers. pic.twitter.com/Tmikv8PGIW
— Dina Titus (@repdinatitus) February 18, 2025
Gambling taxes are often under debate across the U.S., with Ohio Governor Mike DeWine recently proposing a 100% increase on sports betting taxes.
Lawmakers Argue Betting Tax Revenues Stimulate Economies
Reschenthaler stated that the gaming sector's economic contribution is one of the most compelling arguments for repealing the tax. The sector supports over a million jobs across the U.S. and provides more than $70 billion in tax revenue to state and local governments.
The repeal proponents have maintained that eliminating the handle tax would also stimulate further business expansion and the generation of additional jobs, particularly in states where gaming is an economic engine.
Efforts to repeal this tax are not limited to the House of Representatives. Last year, Senators Catherine Cortez Masto of Nevada and Cindy Hyde-Smith of Mississippi introduced the "Withdrawing Arduous Gaming Excise Rates Act," or the "WAGER Act," which pursued the same objective.
Despite growing bipartisan support, previous attempts to repeal the tax have not gained enough traction to advance through Congress.
Along with the handle tax, gambling tax debates include potential changes to how gambling losses are treated under federal tax laws. Currently, gambling winnings must be reported as taxable income, and while losses may be deducted, they may not exceed total winnings. Individuals with a net loss for the year may not deduct those losses from other taxable income.
The current system seems flawed, as the IRS found it was $1.4 billion short of taxes due to unreported gambling winnings in October 2024.
