Nevada Sen. Catherine Cortez Masto and Mississippi Sen. Cindy Hyde-Smith reintroduced the Withdrawing Arduous Gaming Excise Rates (WAGER) Act, aimed at eliminating the federal 0.25% excise tax on all legal sports wagers, also known as the “handle tax,” according to the Las Vegas Review-Journal.
Key Takeaways
- The WAGER Act would stop federal taxes on legal sportsbooks to help them become more competitive.
- Nevada and Mississippi senators said tax elimination would return revenue to local tourism and jobs.
- The effort highlights industry concerns over outdated rules and advantages for offshore betting.
Senators say the tax hurts regulated sportsbooks while aiding offshore operators. Nevada paid $22 million in handle taxes alone in 2022, double what it generated in 2019. Sen. Cortez Masto called the repeal “commonsense legislation” to support gaming states and tribal economies.
“It’s past time to exempt legal sports betting from outdated taxes that are actually incentivizing illegal sportsbooks,” Cortez Masto said. “This is bipartisan, commonsense legislation that will help boost local economies across the United States.”
This is not the first time the WAGER Act has been introduced, as it previously failed in 2024. However, growing concerns over declining visitation to Las Vegas and increased pressure on legal operators from prediction markets and offshore betting are prompting renewed calls for reform.
Sen. Hyde-Smith noted the competitive disadvantage Mississippi casinos face due to these outdated federal levies, especially as newer, unlicensed digital competitors emerge.
“For too long, this outdated federal tax on sports betting has held this industry back, all while giving illegal offshore operators, and now new out-of-state run prediction markets, an unfair edge against our more traditional casinos in Mississippi and elsewhere,” she said.
The legislation also proposes scrapping the $50-per-employee “head tax” on sportsbook staff.
FAIR Bet Act blocked from NDAA by rules committee
Another bill introduced to restore gambling deductions, the FAIR Bet Act, has hit a recent setback.
The bill’s author, Rep. Dina Titus, pushed for it to be added to the National Defense Authorization Act (NDAA), but it failed after the House Rules Committee refused to include it.
Titus sought to undo a Trump-era rule brought about by the One Big Beautiful Bill Act (OBBBA) that cut gambling loss deductions from 100% to 90%, a change critics say forces players to pay taxes even when they break even.
The OBBBA has caused outcries from both professional gamblers and lawmakers alike, with pro poker player Phil Galfond taking to social media to express his concern. “This new amendment to the One Big Beautiful Bill Act would end professional gambling in the US and hurt casual gamblers, too. You could pay more in tax than you won,” Galfond wrote in a post on X.
Sen. Cortez Masto also disagreed with the bill, saying it would do “irreparable harm” to the U.S. gambling industry by pushing gamblers to illegal markets.
This marks the third defeat for Titus’ proposal, following setbacks in the Ways and Means Committee in July and a previous attempt in August. The NDAA passed with more than 1,000 amendments, but her measure was not among them.
