Lawmakers Try Again to End Federal Sports Betting Tax
Summary
On 12 September 2025, Senators Catherine Cortez Masto (Nevada) and Cindy Hyde-Smith (Mississippi) reintroduced the WAGER Act to repeal a long-standing federal excise tax on sports betting — a 0.25% levy on each wager — and a $50 annual fee for each sportsbook employee.
The tax, created in 1951 to fight organised crime’s illegal bookmaking, now raises substantial sums but is criticised for disadvantaging regulated operators. Opponents say it effectively subsidises offshore and illegal bookies that do not pay the levy, while licensed operators and local economies absorb the cost. In 2024 Americans wagered nearly $148 billion, generating around $369 million in federal revenue from the tax. Similar bills were filed previously (mid-2024) and matching measures exist in the House, but legislative hurdles remain.
Key Points
- The WAGER Act seeks to eliminate the 0.25% federal excise tax on sports bets and the $50 yearly fee per sportsbook employee.
- Senators Cortez Masto and Hyde-Smith argue the tax is outdated, originally targeting organised crime, and now harms licensed operators.
- Industry backers say the levy gives offshore and illegal operators an unfair advantage because they don’t pay it.
- In 2024 Americans bet about $148 billion, producing roughly $369 million in federal revenue from the tax.
- Critics note the tax revenue goes to the general US Treasury with no earmarked purpose; lawmakers have questioned how the funds are used.
- Previous attempts to repeal or reform federal gambling rules have stalled, so the WAGER Act faces an uncertain path despite bipartisan support.
Context and Relevance
This proposal sits at the crossroads of federal tax policy, state-level gambling regulation and the commercial realities of a growing legal sports-betting market. States such as Nevada are anxious about tourism and gaming revenue softening, and industry groups argue that keeping the tax reduces investment, jobs and local economic benefits.
If passed, repeal could shift hundreds of millions of dollars back to operators and, proponents say, into state and local economies. However, changing long-standing federal provisions is politically tricky; similar measures (including deductions-related reforms) have become entangled in other legislative priorities and committee roadblocks.
Author style
Punchy: this is short, clear and business-critical for operators and regulators. If you follow gambling policy or manage gambling products, the details matter — repeal would reshape margins and competitive dynamics.
Why should I read this?
Quick and blunt: if you work in or track the betting industry, this could mean lower costs for legal operators and less edge for offshore rivals. It’s the kind of rule change that quietly shifts where money flows — worth a read even if you only skim for the impacts on margins and market competition.
Source
Source: https://www.gamblingnews.com/news/lawmakers-try-again-to-end-federal-sports-betting-tax/