Today, U.S Senator Catherine Cortez Masto (D-NV) and Senator Cindy Hyde-Smith (R-Miss) introduced the Withdrawing Arduous Gaming Excise Rates (WAGER) Act, bipartisan legislation to eliminate federal taxes on sports betting. The WAGER act would specifically exempt legal sports betting from outdated “handle” and “head” established more than 70 years ago.

Established in 1951 to suppress illegal gambling, the Internal Revenue Code (IRC) imposes a federal excise “handle” tax of 0.25% on all legal sports bets, as well as a $50 annual “head” tax per employee for legal sports betting businesses.

In January 2023 alone, Nevada generated a total revenue of $50.44 million from regulated sports betting and paid nearly $22 million in handle taxes in 2022, nearly double the state’s total from 2019.

According to a press release, Cortez Masto believes these gaming revenues for the state and Tribal communities should be reinvested in their local economies.

“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,” said Senator Cortez Masto. “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.”

“The federal sports betting excise tax was enacted more than 70 years ago as a tool to prosecute illegal sports betting operators. Today, with sports betting legal in 38 states and Washington, D.C., this antiquated tax puts legal operators at a competitive disadvantage and rewards illegal offshore bookmakers that pay no federal or state taxes, offer no responsible gaming tools, and 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). “The AGA is grateful to Senators Cortez Masto and Hyde-Smith for their commitment to providing a safe, responsible sports betting market and to continuing to help migrate bettors out of the illegal market, which is bereft of consumer protections and a haven for bad actors and tax evaders. The AGA will continue to work with policymakers to enact legislation to address this harmful tax.”

You can read the full bill text HERE.