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 U.S. Supreme Court has ruled that states can legally offer sports betting, and many states are currently pursuing the legalization and taxation of the activity.
The high court ruled in favor of New Jersey May 14 in Murphy v. NCAA, repealing the Professional and Amateur Sports Protection Act of 1992 (PASPA), which formally prohibited states from “authorizing” gambling related to professional and amateur sports leagues.
New Jersey—the petitioner in Murphy v. NCAA—could start taking legal wagers in the coming days or weeks. Many practitioners said they think the Garden State will take bets on the National Basketball Association and National Hockey League Championship series, which run through mid-June.
“I mean, I wouldn’t surprised if New Jersey even took bets tomorrow,” Marc Dunbar, a partner at Jones Walker LLP in Tallahassee, Fla., told Bloomberg Tax. “New Jersey is by far the most prepared state, with Mississippi not far behind.”
Five states—Mississippi, New Jersey, New York, Pennsylvania, and West Virginia—have already enacted legislation to legalize sports betting, but aren’t expected to begin taking bets for months.
As of May 15, there are 33 active pieces of legislation in 12 states. State measures and proposed tax rates, according to the American Gaming Association, are as follows:
( A.C.A. 18)
( S. 2273)
( H.B. 864)
In 2017, Connecticut legislators passed a law authorizing sports betting. In 2018, the state’s lawmakers were supposed to provide more guidance ( H.B. 5307) to the state agency charged with drafting sports betting regulations, but they failed to do so before the session ended May 9.
Gov. Dannel Malloy (D) said in a May 14 statement that he would consider calling a special session to consider legalizing sports betting in Connecticut.
Professional leagues have largely supported the campaign to end PASPA, but that support has come with a price.
Sports leagues have lobbied for “integrity fees” of 1 percent of all wagers placed. The leagues have, in part, argued that the fee protects the integrity of the game, and that teams should benefit from the revenue created by bets.
Some states have attached an integrity fee to their sports-betting legislation. New York and Kansas have proposed a 0.25 percent integrity fee. Indiana, Kansas, and Missouri have proposed a 1 percent integrity fee.
With assistance from Aaron Nicodemus in Boston.
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