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
The nation’s capital could become the next jurisdiction to legalize sports betting.
District of Columbia council member Jack Evans (D) introduced a bill Sept. 18 that would allow bets and levy a 10 percent tax on gross revenue from wagers.
The bill is the latest proposal since the U.S. Supreme Court cleared the way for states to allow bets on sports in its May ruling in Murphy v. NCAA, which repealed the federal Professional and Amateur Sports Protection Act of 1992 (PASPA). That law had prohibited states from “authorizing” gambling related to professional and amateur sports leagues.
“Today, we take the first steps towards capturing this exciting new stream of revenue, instead of watching District resident dollars fill the coffers of other jurisdictions,” Evans said in a news release. He said the city should take advantage of its ability to act before Virginia or Maryland and create a thriving betting market that draws bettors to D.C.
Joe Florio, Evans’ communications director, told Bloomberg Tax Sept 19 he is confident the bill will pass by December. It must go through a council hearing, which will take place in October, he said.
Since the Murphy ruling, Delaware, New Jersey, Nevada, Mississippi, and West Virginia have legalized sports betting and begun taking bets, opening new revenue streams in the process. New York, Pennsylvania, and Rhode Island have legalized sports betting, but haven’t yet started taking bets.
Tax rates in the states vary significantly, from 8.5 percent on in-person bets in New Jersey to 51 percent on sports betting revenue in Rhode Island.
In 2018, 19 states proposed legislation to legalize sports betting, and gaming officials expect at least the same amount to push for the activity during the upcoming session.
Currently, the closest place for Washington residents to bet on sports games is the Hollywood Casino at Charles Town Races in West Virginia.
Council members Vincent C. Gray (D), Mary M. Cheh (D), Brandon T. Todd (D), Anita Bonds (D), and Robert C. White Jr. (D) co-sponsored the sports betting bill. Seven council members and the mayor’s approval are needed for passage.
After a bill is passed, it is presented to the U.S. Congress, and if untouched for 30 days, becomes law, according to Florio.
Congress is also looking to get in on the action, and the House Subcommittee on Crime, Terrorism, Homeland Security and Investigations plans a Sept. 27 hearing on sports betting.
The scheduled hearing on Capitol Hill follows recent calls for federal intervention from Senate leadership.
Senate Minority Leader Charles E. Schumer (D-N.Y.) on Aug. 29 proposed a “desperately needed” federal sports betting framework, a move that state tax policy specialists say could hurt state sovereignty and tax revenue pursuits.
Schumer also published a memo that includes three principles he deemed necessary in a framework: protecting young people and those suffering from gambling addiction, protecting the integrity of the game, and protecting consumers and individuals placing bets.
During an Aug. 24 update on the Senate floor, Sen. Orrin G. Hatch (R-Utah) said progress is being made, and that he will be releasing a legislative proposal “in the coming weeks.” There is currently a 0.25 percent federal excise tax on all betting handles.
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