Senators Catherine Cortez Masto (D-Nev.) and Cindy Hyde-Smith (R-Miss.) have introduced the Withdrawing Arduous Gaming Excise Rates (WAGER) Act. The bipartisan legislation would protect legal sportsbooks and gaming businesses. It would also help states like Nevada and Tribal communities reinvest gaming revenues into their local economies. The WAGER Act would exempt legal sports betting from “outdated handle and head taxes.”
“In Nevada, legal sports betting is a thriving industry that adds to the world-class experience of watching our championship-level professional sports teams,” Cortez Masto said via the press release. “It’s past time to exempt legal sports betting from outdated taxes that are actually incentivizing illegal sportsbooks. This is bipartisan, commonsense legislation that will help boost local economies across the United States.”
Currently, the Internal Revenue Code (IRC), which was established in 1951 to suppress illegal gambling, imposes a federal excise “handle” tax of 0.25% on all legal sports bets, along with a $50 annual “head” tax per employee for legal sports betting businesses.
In terms of incentivizing illegal offshore operators, Senators Cortez Masto and Hyde-Smith pointed out that under the IRC, they can operate more cheaply and often offer better odds. In 2022 alone, Nevada paid about $22 million in handle taxes. It was more than double the state’s total from 2019.
The WAGER Act would flip the script. Additionally, state regulators would continue to maintain laws to crack down on offshore sportsbooks. A recent report released by the American Gaming Association (AGA) showed that illegal gambling is increasing in the United States. This includes a 22% increase in illegal gambling since 2022. Based on the research, $53.9 billion out of the $169 billion wagered over that period has come from illegal operators.
Mississippi is one of 38 states currently offering some form of legal sports betting. This does not include the Missouri market which will be launching December 1. The Magnolia State offers retail sports betting along with mobile wagering, as long as the bets are placed while on casino land. There are over 30 casinos in Mississippi, three of which are tribal properties.
The bottom line is that gambling generates significant revenue for the state. Sen. Hype-Smith said Mississippi casinos and resorts play a key role in tourism, jobs, and community investment along the Gulf Coast. She supports the notion that the outdated federal tax on sports betting has held the industry back.
“I’ve long pushed to eliminate this tax so we can modernize the system, strengthen our local economies and tax base, and ensure gaming revenues support Mississippi interests,” Hyde-Smith said.
