A bipartisan bill that aims to repeal a federal tax on legal sports betting is making its way through the U.S. House of Representatives. It is the fourth attempt to pass the Discriminatory Gaming Tax Repeal Act of 2025.
Democratic Rep. Dina Titus of Nevada and Republican Guy Reschenthaler of Pennsylvania introduced the proposal. They seek to eliminate a 0.25% tax on all legal gambling.
History and impact of the tax
The “gambling tax” was created in 1951 to combat illegal gambling operations. At the time, Nevada was the only state where gambling was allowed.
Currently, legal sports betting operates in 38 states and Washington DC. This scenario was made possible after the US Supreme Court struck down the Professional and Amateur Sports Protection Act in 2018.
Representative Dina Titus said the outdated federal tax hurts legal operators. “It doesn’t make sense to give the illegal market an advantage over legal sports betting with a tax that the federal government doesn’t even track.”
Furthermore, Dina Titus highlighted: “Illegal sportsbooks do not pay the 0.25% tax on sports betting and the $50 per head tax on sportsbook employees, which gives them an unfair advantage.”
US Betting Industry Support
The American Gaming Association (AGA) is also advocating for the tax to be repealed. AGA CEO Bill Miller said: “Federal excise and head taxes imposed on legal U.S. sports betting companies generate little meaningful revenue for the government.”
Bill Miller said: “Eliminating these taxes is a long-awaited step toward enabling a legal and regulated sports betting environment that will better protect customers and generate much-needed revenue for state and local economies.”
Previous attempts and reasons for revocation
This is the fourth time the Congressional Gaming Caucus co-chairs have introduced the legislation. Attempts in 2019, 2021 and 2023 failed. The bill subsequently moved to the House Ways and Means Committee for consideration.
- Competitive inequality The tax only applies to legal and regulated bookmakers, benefiting illegal operators.
- Taxation on volume, not profits The tax is levied on the handle (total amount bet), not on profits. The bookmakers only keep 5% to 10% of the handle after the results.
For example, a house that handles $100 million in bets but makes a profit of $5 million still pays $250,000 in taxes.
- Double Taxation States with legal gambling already impose hefty taxes. The federal tax is an additional cost.
In short, the repeal of this tax is seen as essential to balance the market and strengthen legal operations. Thus, the bill awaits analysis and voting in the Chamber of Deputies and the Senate.
