Federal Excise Tax on Sports Betting Gets Axed in 2025 Under New Bill

The "Discriminatory Gaming Tax Repeal Act of 2025" (SEC. 1) does exactly what it says on the tin: it kills the federal excise tax on legal wagers. Starting January 1, 2025, these taxes—detailed in Chapter 35 of the Internal Revenue Code—will be a thing of the past (SEC. 2).

Scrapping the Sports Betting Tax

This bill is straightforward—it repeals existing excise taxes on wagering. Right now, these taxes are a percentage of the money handled in legal betting operations. By eliminating them, the government's giving up a revenue stream, but it's also potentially giving a boost to the legal gaming industry.

Real-World Rollout

Imagine you're running a sportsbook or a casino. Fewer taxes mean more money in your pocket, which could mean more investment in your business, better odds, or bigger payouts for customers. For the average Joe placing a $20 bet, it might mean slightly better returns in the long run if bookmakers pass on the savings. But it could also mean the government has less money to spend on, well, everything else. Less tax revenue could mean cuts elsewhere, though this bill doesn't specify where those cuts might come from.

The Bigger Picture

This move could shift the landscape of legal gambling. By making it cheaper to operate, the bill might encourage more legal betting operations. This needs to be balanced with a look at potential downsides. For example, easier access to betting could lead to an uptick in problem gambling for some people. It's a trade-off: potential economic benefits versus potential social costs. The bill doesn't address how to handle a possible increase in gambling addiction, which is something to keep an eye on. It also simplifies the tax code, getting rid of one set of industry-specific taxes. Whether that simplification is worth the potential hit to government revenue and the potential increase in problem gambling is the big question.