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Sports betting operators in the U.S. may be getting closer to some long-sought tax relief. Two senators have once again put forward legislation to roll back the federal excise tax on wagers, saying it hurts licensed sportsbooks while giving offshore operators the upper hand.
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Nevada Sen. Catherine Cortez Masto and Mississippi Sen. Cindy Hyde-Smith have reintroduced the Withdrawing Arduous Gaming Excise Rates (WAGER) Act. The bill seeks to eliminate the federal 0.25% excise tax on legal sports betting, commonly known as the handle tax.
Cortez Masto described the measure as “commonsense legislation” designed to strengthen both state gaming revenues and tribal economies.
“It’s past time to exempt legal sports betting from outdated taxes that are actually incentivizing illegal sportsbooks,” she said. “This is bipartisan, commonsense legislation that will help boost local economies across the United States.”
Supporters argue that the federal handle tax creates unnecessary costs for regulated operators, particularly as offshore books and digital prediction markets continue to attract U.S. customers without paying these fees. In 2022 alone, Nevada sportsbooks saw their handle tax bill hit $22 million, reflecting the growing burden.
Sen. Hyde-Smith pointed out that Mississippi casinos face similar hurdles. She said:
“For too long, this outdated federal tax on sports betting has held this industry back, all while giving illegal offshore operators, and now new out-of-state run prediction markets, an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 against our more traditional casinos in Mississippi and elsewhere.”
The senators believe eliminating the tax would help level the playing field, especially as states rely on betting revenue to fund local programs.
The WAGER Act had previously been introduced but failed to pass in 2024. However, declining visitor numbers in Las Vegas and increasing competition from alternative betting platforms are giving the proposal new momentum.
Alongside removing the excise tax, the bill also aims to eliminate the $50-per-employee head tax on sportsbook workers, another measure that operators say drains resources from regulated businesses.
Another gaming-related bill, the FAIR Bet Act, has recently run into trouble. Championed by Rep. Dina Titus, it sought to restore full gambling loss deductions for players. Current tax rules, introduced under the Trump administration’s One Big Beautiful Bill Act (OBBBA), cut deductions from 100% to 90%.
Critics argue that the change unfairly forces gamblers to pay taxes even if they only break even. Titus tried to attach the measure to the National Defense Authorization Act (NDAA), but the House Rules Committee declined to include it.