Bill aims to repeal federal sports betting excise tax

A pair of lawmakers from gaming-friendly states are taking another bipartisan shot at repealing a longstanding federal tax on sportsbooks.

On Friday, U.S. Sens. Catherine Cortez Masto, D-Nev., and Cindy Hyde-Smith, R-Miss., reintroduced the Withdrawing Arduous Gaming Excise Rates (WAGER) Act, which would exempt regulated sports betting operators from the current 0.25 percent federal excise tax placed on all legal wagers. The bill’s sponsors say the WAGER Act will “protect legal sportsbooks and gaming businesses” and “help states like Nevada and tribal communities reinvest their gaming revenues into their local economies.”

Cortez Masto and Hyde-Smith introduced the WAGER Act in July 2024, but the bill died in the last congressional session. Similar bipartisan federal legislation has been introduced in the lower chamber by U.S. Rep. Dina Titus, D-Nev., and Guy Reschenthaler, R-Pa.

Visitation to Las Vegas and Southern Nevada has declined in 2025, due to a variety of internal and external factors. Cortez Masto said now is an ideal time to provide tax relief.

“It’s past time to exempt legal sports betting from outdated taxes that are actually incentivizing illegal sportsbooks,” Cortez Masto said in a news release. “This is bipartisan, commonsense legislation that will help boost local economies across the United States.”

The WAGER Act not only exempts sportsbooks from the federal excise “handle” tax, but it also exempts them from the $50 per employee annual tax known as the “head” tax. The taxes are the result of the 1951 Internal Revenue Code, which was established to curtail illegal gambling.

Nevada paid nearly $22 million in “handle” taxes in 2022, nearly double the state’s total from 2019, according to the senator’s office.

Hyde-Smith said she has “long pushed” to eliminate the federal excise tax in an effort to modernize the system and ensure gaming revenue taxes are supporting the state’s interests.

“Mississippi’s casinos and resorts play a key role in tourism, jobs, and community investment along our Gulf Coast,” she said in the release. “For too long, this outdated federal tax on sports betting has held this industry back, all while giving illegal offshore operators, and now new out-of-state run prediction markets, an unfair edge against our more traditional casinos in Mississippi and elsewhere.”

Cortez Masto and Hyde-Smith’s WAGER Act should not be confused with the Winnings and Gains Expense Restoration (WAGER) Act introduced by U.S. Rep. Andy Barr, R-Ky. Barr’s WAGER Act seeks to restore the federal gambling loss deduction to 100 percent, which was recently amended to 90 percent in the One Big Beautiful Bill Act. Cortez Masto, Titus and others have introduced their own bills looking to restore the gambling loss deduction, arguing that the 90 percent cap forces gamblers to pay a “phantom tax” on potentially unearned money.

Contact David Danzis at ddanzis@reviewjournal.com or 702-383-0378. Follow @AC2Vegas_Danzis on X.