Reps. Dina Titus and Guy Reschenthaler Renew Effort to End Federal Sports Betting Tax

tax is now outdated and serves only to disadvantage legal sportsbooks, particularly as the landscape of sports betting has evolved dramatically since its legalization in 2018.

This is not the first time Titus and Reschenthaler have pushed for the repeal of the handle tax. The pair had previously attempted to have the tax repealed in 2019, 2021, and 2023, but the bills failed to gain significant traction within Congress. However, with the increasing recognition of sports betting as an economic powerhouse and the expansion of legal wagering across the country, the two lawmakers remain committed to eliminating the tax that they believe no longer serves its original purpose.

The Impact of Illegal Sportsbooks

A primary argument made by Titus is the fact that illegal sportsbooks are not subject to the same tax obligations as their legal counterparts. The 0.25 percent excise tax is levied only on legal sportsbooks, creating a significant disadvantage for those businesses when competing with illegal operators who by these regulations. Titus has pointed out that, in states like Nevada and Pennsylvania, where legal sportsbooks thrive, illegal bookmakers do not pay the handle tax, further skewing the market in favor of unregulated operations.

“Illegal sportsbooks do not pay the 0.25 percent sports handle tax and the accompanying $50 per head tax on sportsbook employees, giving them an unfair advantage,” Titus said in a recent statement. “I once asked the IRS where the revenue from the handle tax went in the federal budget and they didn’t even know. It makes no sense to give the illegal market an edge over legal sportsbooks with a tax the federal government does not even track.”

Titus’s criticism emphasizes the inefficiency and ineffectiveness of the tax, especially in light of the fact that illegal operators are not held to the same standards. She asserts that the lack of federal oversight on the tax revenue makes the entire system feel disconnected and outdated.

Despite the clear rationale for repealing the handle tax, efforts in previous years to push through the Discriminatory Gaming Tax Repeal Act have been unsuccessful. The bill has struggled to gain sufficient within the House committees, which has stalled any significant legislative progress.

Nevertheless, Titus and Reschenthaler remain optimistic. They argue that the tax is no longer justified given the modern, regulated sports betting market that has emerged since the Supreme Court struck down the federal ban on sports betting in 2018. As sports betting expands and brings in substantial revenue for states and the federal government, the pair believes it is time to level the playing field by repealing the handle tax that continues to put legal sportsbooks at a disadvantage.

The timing of the bill’s reintroduction is particularly significant, given the robust growth of the sports betting industry in recent years. According to the American Gaming Association, the 2025 NCAA “March Madness” basketball tournament is expected to see $3.1 billion in total bets, a marked increase from the previous year’s $2.7 billion in wagers. This demonstrates the rising popularity of sports betting, especially as more states legalize and regulate the industry.

In Nevada, one of the most established markets for legal sports betting, sportsbooks took in $8.26 billion in wagers during 2024, generating $481.3 million in revenue and contributing $32.5 million in gaming taxes to state coffers. New York, the largest sports-betting market in the U.S., reported $19.18 billion in sports bets, resulting in $1.7 billion in gross gaming revenue and $862.6 million in tax revenue.

These figures illustrate the growing importance of sports betting as both an economic driver and a significant source of tax revenue. With legal sportsbooks continuing to thrive, proponents of the tax repeal argue that the outdated 0.25 percent excise tax only serves to undermine the competitiveness of the market and should be removed.

Will 2025 Be the Year of Change?

While past attempts to eliminate the handle tax have faltered, 2025 could present a unique opportunity for success. The rapid expansion of the legal sports betting market, along with the increasing awareness of the tax’s negative effects on legal sportsbooks, could help generate the necessary for a successful repeal.

As lawmakers continue to work toward reforming the tax structure for the rapidly growing sports betting industry, it remains to be seen whether the Discriminatory Gaming Tax Repeal Act will gain the momentum it needs to become law. However, with both bipartisan and compelling economic arguments behind it, this latest attempt could mark a pivotal moment in the future of sports betting in the United States.

Source:

Nevada legislator revives effort to kill sports betting tax, reviewjournal.com, March 21, 2025.