As the football season kicks off, U.S. Senators Catherine Cortez Masto (D-Nev.) and Cindy Hyde-Smith (R-Miss.) have revived bipartisan legislation designed to support legal sports betting operations across the country. The Withdrawing Arduous Gaming Excise Rates (WAGER) Act would eliminate two federal taxes applied to sportsbooks: a 0.25% excise tax on each wager and a $50 annual fee per employee.
Originally enacted in 1951 to curb illegal gambling operations tied to organized crime, these taxes remain in place despite the widespread legalization and regulation of sports betting in over 30 U.S. states.
Outdated Tax Seen as Barrier to Legal Operators
Supporters of the bill argue that the current tax framework unfairly burdens legitimate businesses while allowing offshore and unregulated platforms to operate at lower costs. In 2022, Nevada sportsbooks alone paid nearly $22 million in federal handle taxes—almost double the amount paid in 2019—highlighting the growing impact on legal operators.
“It’s past time to exempt legal sports betting from outdated taxes that are actually incentivizing illegal sportsbooks,” said Senator Cortez Masto. “This is bipartisan, commonsense legislation that will help boost local economies across the United States.”
Senator Hyde-Smith emphasized how the tax affects her state’s Gulf Coast casino industry, stating: “Mississippi’s casinos and resorts play a key role in tourism, jobs, and community investment… this outdated federal tax on sports betting has held this industry back, all while giving illegal offshore operators, and now new out-of-state run prediction markets, an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.”
Broader Push to Reform Gambling Regulations
This isn’t the first attempt to push the WAGER Act through Congress—a previous version introduced in 2024 stalled. Now reintroduced with expanded bipartisan backing, the Senate version aligns with similar legislation in the House sponsored by Representatives Dina Titus (D-Nev.-01) and Guy Reschenthaler (R-Pa.-14).
Lawmakers argue that removing these taxes would make legal sportsbooks more competitive, support job growth, and help communities better reinvest gaming revenue. Tribal gaming operators, often more financially constrained, also stand to benefit from a more balanced playing field.
In 2024 alone, Americans wagered nearly $148 billion on sports, generating $369 million in federal excise taxes. However, those funds are funneled into the U.S. Treasury’s general account without being allocated to specific initiatives such as gambling oversight or law enforcement—raising questions about the tax’s current purpose.
Legislative Outlook Remains Uncertain
While the WAGER Act enjoys bipartisan support, similar gambling-related bills have historically struggled to pass due to concerns over reduced federal revenue. Other efforts to modernize gambling policy—such as the FAIR Bet Act and a separate House proposal also named the WAGER Act—are part of a broader national conversation about reform.
Still, with legal betting rapidly expanding and outdated tax structures under scrutiny, lawmakers see the potential for meaningful change. If the WAGER Act gains traction, it could mark a significant step toward updating federal gambling laws to better align with today’s regulated industry.
Source:
“As Football Season Begins, Cortez Masto, Hyde-Smith Introduce Bipartisan Bill to Boost Local Sports Tourism and Gaming Economy”, cortezmasto.senate.gov, Masto. Sep 12, 2025.
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