Daily Tax Report: State provides authoritative coverage of state and local tax developments across the 50 U.S. states and the District of Columbia, tracking legislative and regulatory updates,...
By Ryan Prete
Americans are expected to gamble $4.6 billion on Sunday’s Super Bowl LII, which a gaming association is using in the latest call for the U.S. Supreme Court to strike down a 26-year old ban on sports betting.
“The ban on sports betting has been a tremendous failure,” Geoff Freeman, president and CEO of the American Gaming Association, told Bloomberg Tax.
The case at issue is Murphy v. NCAA—New Jersey’s attempt to repeal part of its state ban on sports betting in an effort to revive the struggling Atlantic City region. The high court agreed to review the case after a lower court ruled that the partial repeal violated the federal Professional and Amateur Sports Protection Act of 1992 (PASPA), which prohibits states from “authorizing” gambling related to professional and amateur sports leagues.
“The Supreme Court took an important step by taking up the issue,” Freeman said Jan. 30 during a call discussing the association’s report on Super Bowl wagering. “But until PASPA is found unconstitutional, or Congress repeals it, it will continue to flourish.”
According to a May 2017 Oxford Economics report, an estimated $107 billion was illegally wagered in 2015.
In Jan. 24 written testimony before the New York Senate, Dan Spillane, senior vice president and assistant general counsel for league governance and policy at the National Basketball Association, announced the league’s support for efforts to end PASPA, but asked that operators “pay each league 1% of the total amount bet on its games.”
Freeman said such a request would both hurt the integrity of the NBA and dwarf any revenue returned to states.
Bloomberg Tax analyzed the breakdown of revenue for a $100 sports bet wager if states granted the NBA’s request, based on Nevada’s 6.75 percent state tax on gross gaming revenue—the only current state with legalized sports betting:
Because the bettor keeps 95 percent of the bet placed, leaving only 5 percent for revenue division, the NBA’s one dollar fee would equate to 20 percent of the available profit for regulators.
Currently, there are almost 30 pending pieces of legislation in 15 states concerning sports betting regulation, according to MultiState Associates.
Indiana—one of the most recent states to introduce legislation—is the first to include an “integrity fee” which would set aside 1 percent of each wager for the sports league at play. The bill includes a 9.25 percent tax on betting revenue.
West Virginia introduced legislation on Jan. 29 that would tax legalize sports betting via the state lottery, the bill includes a ten percent tax on gross gaming revenue.
While more states ready frameworks for if the high court reverses PASPA, most will still wait for the high court’s decision, said Ethan Wilson, policy director of commerce and financial service at the National Conference of State Legislatures.
“States that want to legalize and regulate sports betting are being proactive,” Wilson told Bloomberg Tax. “However, despite the significant flurry of recent legislative activity on sports betting, many states will work on this issue after the Court hands down its ruling. This issue will continue to be important in state capitols around the country for some time to come.”
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)