Lawmakers Attempt Federal Betting Tax Repeal

A bipartisan bill to repeal a federal tax on legal sportsbooks is heading to the House. Will it be a case of fourth time lucky for the Discriminatory Gaming Tax Repeal Act of 2025?

Democratic Representative Dina Titus of Nevada, and Republican Guy Reschenthaler of Pennsylvania, introduced the legislation which aims to remove a 0.25% federal excise tax on all legal wagers.

The ‘handle tax’ was first introduced in 1951, to combat illegal gambling operations, when Nevada was the only state where betting was legal.

Today, legal sports betting is operational in 38 states and Washington D.C., following the US Supreme Court decision to strike down the Professional and Amateur Sports Protection Act, in 2018.

The outdated federal tax puts legal operators at a disadvantage, according to Dina Titus.

She says: “It makes no sense to give the illegal market an edge over legal sportsbooks with a tax the federal government doesn’t even track. The Discriminatory Gaming Tax Repeal Act of 2025 repeals a tax that does nothing except penalize legal gaming operators for creating thousands of jobs in Nevada and 37 other states around the nation.

“Illegal sportsbooks do not pay the 0.25% sports handle tax and the accompanying $50-per-head tax on sportsbook employees, giving them an unfair advantage.”

The American Gaming Association also supports the repeal of this tax. AGA CEO Bill Miller stated that the tax places legal sportsbooks at a competitive disadvantage, as well as benefiting illegal offshore bookmakers.

He said: “The federal excise and head taxes levied on legal U.S. sportsbooks generate little meaningful revenue for the government. Instead, they place legitimate businesses at a significant competitive disadvantage against illicit gambling operations which skirt taxes and licensing fees.

“Though originally enacted in the 1950s as a tool to curb illegal gambling, these antiquated federal taxes now give illegal operators a leg up. Eliminating these taxes is a long overdue step to enable a legal, regulated, environment for sports betting that will better protect customers and generate much-needed revenue for state and local economies.”

This is the fourth time the two co-chairs of the bipartisan Congressional Gaming Caucus have introduced the legislation. Attempts in 2019, 2021, and 2023 all failed to get over the line.

The Discriminatory Gaming Tax Repeal Act of 2025 has been referred to the House Committee on Ways and Means for consideration, before committee review, potential amendments, and votes in both the house and the senate.

Reasons Why the ‘Handle Tax’ is Disputed

An Uneven Playing Field

The tax applies only to legal, regulated sportsbooks, handing a clear advantage to unregulated operators.

Tax on Handle: Not Profits

The tax applies to the sportsbook’s handle: the total amount of money wagered. Problematic, because sportsbooks keep only 5% to 10% of the handle, post result.
For example, a sportsbook that handles $100 million in bets, but makes only $5 million, still has to pay $250,000 in tax.

Double Taxation: State and Federal

Every state with legal sports betting, already imposes weighty taxes. The federal tax is an additional burden.