The 1% Tax on Betting

The authorities have proposed a possible 1% tax on all bets. We examined the effect of the potential tax on sportsbook operators. The figures used to calculate the repercussions of the tax was the figures submitted by Nevada’s licensed sportsbooks. The numbers permitted an inquiry into Nevada’s sports book, which is presumed to have not been published.

The official numbers at the end of November 2017 indicate that a 195 sports books were situated in Nevada for a period of a year. The net profit of the 195 books was $233,299,000. When the total amount is portioned amongst the 195 sports books, it equates to one Nevada sports book having an average winning of $1.2 million annually. The percentage reported by the gambling operators for winning is 4.82. At that percentage, a sports book in Nevada has about $25 million in revenue annually. The figure is derived by taking the $1.2 million and dividing it by 4.82%.

US Supreme Court

The US Supreme Court’s impending decision to rule that the federal law, stated in the Professional and Amateur Sports Protection Act (PASPA) which inhibits states to legalize sports betting, is unconstitutional. When the High Court announces its decision, more than 12 states will take advantage of the new law passed that allows intra-state betting of sports events.

Alan Morrison, a representative from Indiana, has presented a bill which grants the national sports leagues 1% on any bets placed. Morrison refers to the tax as an integrity fee. The proposed state tax for gaming revenue is 9.25% and the current federal excise tax on a handle is 0,25%. In addition, the authorities want to institute a 1% tax on all bets. The percentage of tax, a sports gambling operator has to pay to run operations is exorbitant. The courts and PASPA have to re-evaluate the strategy of adding additional taxes, as operators in most states are paying an exponential tax sum. The sports gambling operators will see a further decrease in profits if the new tax law is instituted. The tax for betting does not seem logical to operators.

Leave a Reply

Your email address will not be published. Required fields are marked *