On July 31, US Senators Cathrine Cortez Masto (Nevada) and Cindy Hyde-Smith (Mississippi) introduced a new bill proposing the repeal of the US federal excise tax on gambling. The name of the bill is the “Withdrawing Arduous Gaming Excise Rates Act” and the “WAGER Act” for short.

Almost immediately after the bill was filed, the American Gaming Association (AGA) came out in favor of it. It also commented that the bill would reduce operators’ taxes by tens of millions of dollars per year.

Additionally, AGA said that the system currently in place was introduced over 70 years ago to prosecute sports betting operators that are operating illegally. Its stance is that now when the activity is legal in 38 states and Washington DC, the excise tax is a burden to bookmakers and other iGaming providers and is hurting their operations.

This isn’t the only issue brought up over gambling taxes recently. With more and more gambling enthusiasts looking for mobile slots apps to play, there’ve been discussions over how fair the taxes iGaming operators are paying on slot games are.

Twelve casino operators have even filed a lawsuit against the state of Pennsylvania, demanding that the court deems the tax they pay on slot machines as unconstitutional. The reason behind this is that the same tax rules don’t apply to electronic game terminals known as skill games.

When playing in a real money online casino, players want to get the best deals possible and US-based operators are struggling to offer them due to higher taxes than in many other countries.

AGA’s stance on slot taxes is that it’s time to update the current slot jackpot threshold, which currently stands at $1,200. Research commission by the association has suggested raising it to $5,000, which would contribute to $500 million in savings for the iGaming companies.

When it comes to sports betting tax, AGA believes that a federal excise tax of 0.25% on the amount of any sports wager currently serves no dedicated purpose. Its stance is also that repealing this tax could help empower a safe and regulated marketplace for gambling in the US.

When speaking about the WAGER Act, Senator Cathrine Cortez Masto added that with so many championship-level sports teams in Nevada, the state is aware of revenue that can be generated from sports gambling. She added that the new bipartisan legislation will help the sports gaming industry and keep money in the state. Cortez Masto also said that the bill will help create more jobs in the sector.

Senator Cindy Hyde-Smith of Mississippi said that casinos play a huge role in the state’s tourism industry. She believes they could do even more if outdated federal taxes that hurt their operations were repealed.

AGA CEO and president Bill Miller said that the association is grateful to both Senators and their commitment to ensuring a safe and responsible sports betting market in the US. He added that AGA will continue to cooperate with policymakers to enact the legislation and address the tax issue.

However, it’s not to say that there aren’t any issues related to the bill. Previous efforts to do the same and help sportsbooks never gained traction. Additionally, there’s a conflicting bill that presents a threat in both chambers. The Gambling Addiction Recovery, Investment and Treatment (GRIT) Act was introduced at the start of 2024.

This legislation aims at keeping the federal excise tax but forwarding the money to treatment and research of problem gambling and responsible gambling. The GRIT Act was proposed by Senator Richard Blumenthal and Representative Andrea Salinas.

The US Supreme Court allowed states to legalize sports betting in 2018, striking down a 1992 federal law that prohibited them from doing so. The activity started growing rapidly and has turned into a $11 billion industry since. It’s predicted that Americans will legally spend $45 billion on sports betting once the market matures even more.

Advertising is viewed as an important part of promoting a safe and regulated sports betting market in the US. However, there’s a lot of discussion on how often viewers should be shown such ads. Earlier this year, the NFL said less than 5% of its in-game ads are sports betting ads.