Wyoming legislators are reviewing three proposed changes to their legal sports betting market.
The state Select Committee on Capital Financing and Investments proposed three tax hikes, including a doubling of the sports betting revenue tax rate.
Key Takeaways
- The state market regulates five online sportsbooks
- Wyoming is the least-populated state in the country
- Legislators installed a low tax rate to offset the lack of in-state customer base
Wyoming is one of 38 states that legalized sports betting. Wagers may be placed at commercial online sportsbooks or at in-person retail casinos, with mobile operators paying 10 percent of their revenue in state taxes.
That figure could soon be lost in the past, as the committee instructed its members to draft legislation to increase the rate to 20 percent. This follows a national trend of many state regulators increasing their authority over the market.
Several other changes to the state’s gambling market were proposed. They included increases from 20 to 25 percent on “skill-based amusement games” and a bump from 1.5 to 2.5 percent on historic horse racing.
The committee also discussed creating a central integrity system that would allow third parties to audit gaming machine revenues.
Sen. Tara Nethercott (R-Laramie County) said that Wyoming has been “generous” and offered “modest regulation with little oversight” to gaming operators.
The market trends upward
Wyoming generated $3.8 million in taxes from $69 million in revenue since it launched sports betting in September 2021. Cowboy State Daily said that $24.9 million of that revenue was generated via online and retail sportsbooks in 2024.
The Wyoming Gaming Commission’s latest revenue report for April also showed that sportsbooks posted a $15.8 million handle, a 2.7 year-over-year increase, and $1.2 million in taxable revenue, a 30 percent year-over-year increase.
While the growth is promising, the returns are still below what most states enjoy. Karen Vaughn, an analyst at the legislature’s nonpartisan advisory office, said that states with legal sports betting have an average tax rate of 19 percent.
That said, Wyoming could not afford a steep tax rate due to its lack of population density and the possibility of scaring sportsbook operators – who paid $100,000 for a five-year license and $50,000 for every five years beyond – out of the market.
States continue to increase taxes
As mentioned, many other states recently raised or have explored increases in gambling taxes.
Illinois controversially instituted a $.25-.50 per-bet tax earlier this month, less than a year after it doubled its revenue tax from 20 to 40 percent, prompting FanDuel and DraftKings to respond with $.50 surcharges on all accepted wagers.
Maryland also greenlit an increase from 15 to 20 percent of sportsbook revenue during their budget meetings. Louisiana also raised its tax rate from 15 to 21.5 percent and will use the extra money to fund Division I athletic programs at in-state colleges and universities.
