- Nevada Congressman Dina Titus seeks to abolish the required 0.25% excise tax on sports betting in the US.
- The IRS collects millions of dollars each year from every state with a regulated sports betting industry through this tax, which was passed into law in 1951.
- Titus will go before the United States Congress later this year to propose laws that would indefinitely suspend this tax liability.
CARSON CITY, Nev. – A state consumption tax on sports betting has existed since 1951 and Representative Dina Titus (D-NV-1) of Nevada continues efforts to remove this requirement.
In the last meetings since the lifting of PASPA In 2018, Titus urged the industry to be exempt from this tax because it considers it obsolete and was enacted at a time before sports betting became the ever-growing and hugely popular national market that it is today.
What is this excise duty and what is Titus' argument?
The Revenue Act of 1951 provides a tax, also known as the Excise tax of 0.25% on all bets made with a sports betting company in the United States. The amount of money raised by the US government in this tax is much higher than could have been imagined when the proposal was first drafted. In today's marketplace, sports bettors across the country put well over $ 20 billion a year on sporting events, all of which are subject to excise duty.
As more states regulate sports games, the profits from this tax grow with the market. In 2021, Nevada had to cross a fork along with four other states at least $ 4 million to the IRS because that's what their 0.25% tax adds up to. On Tuesday, Titus spoke before the House of Representatives Committee on Ways and Means to discuss the reasons why this tax should be abolished.
That was a big argument for the Congresswoman Coronavirus pandemic and how this will affect the gaming industry. Operators lost an enormous amount of money in 2020 and thousands of people lost their jobs because those sports betting had to lay off employees because it was too costly to keep them on the payroll. Paying this tax only benefits the money these companies have already lost abysmal fiscal year 2020. Titus also went back to the reflections of her last presentation on the subject in July.
"Sport is back," said Titus. “Unfortunately, the penalty for legal sports betting never went away. The Handle Tax makes it difficult for legal gambling establishments to compete with illegal operators. The repeal will push more consumers out of the black market and into a well-regulated market. Forcing sports betting to pay a tax per employee is the last thing we need if gambling establishments are still making announcements of new rounds of layoffs and vacations. "
Something else that causes Titus to push for this repeal is the fact that when questioned, The IRS has no answers on how to use the money received through this excise tax. Before the outbreak of COVID-19, Nevada alone owed the IRS $ 13.3 million with that tax in 2019. The excise tax was originally introduced in 1951 to prevent illegal sports betting from taking place in states. However, with sports betting regulated in more than half of the country, this is no longer a problem that the law is out of date and out of sync with the world of sports betting of 2021.
There is no telling whether Titus will manage to exempt the sports betting market from excise tax in her fight with the US Congress in 2021. Excise tax opponents argue that it doesn't work in the world today, but given the amount of money the US government receives from sports betting revenues, it will be an uphill battle to rid the industry of this law.
However, Titus has plans to go again before Congress Reintroduction of legislation to remove this requirement Sometime this year while Congress is in session and there is no doubt that sports betting companies are in their corner for this to happen.
News tags: Coronavirus | Dina Titus | IRS | Nevada | PASPA | The Revenue Act of 1951 | House of Representatives Committee on Ways and Means | United States Congress
Christina has been writing for as long as she can remember and is doing intensive research on the newly regulated sports betting market. She comes from a family of sports enthusiasts who from time to time make friendship bets. During the winter months, Christina bakes cookies and beats all the staff at Mario Kart … the N64 version, of course.