Last week Sen. Richard Blumenthal and U.S. Rep. Andrea Salinas. introduced a proposal aimed at fighting problem gambling that’s funded by existing taxes on sports betting. Under the terms of the Gambling Addiction Recovery, Investment, and Treatment Act (GRIT) about half of the money currently collected under .25 percent federal excise tax would be funneled into programs aimed at helping problem gamblers.
While the idea seemed fairly innocuous to the layman, and was even supported by the National Council for Problem Gambling, the American Gaming Association (AGA) isn’t quite so convinced. In comments made to SBC Americas, AGA Senior Vice President, Government Relations Chris Cylke shared his views on why GRIT is not great.
“Our industry’s growth means that there’s never been more attention paid to or money invested in problem gambling support than there is today. Nearly every tax dollar earmarked for problem gambling services comes from casino gaming taxes, including new legal sports betting and iGaming markets.
Congress enacted the federal sports betting excise tax in the 1950s as a tool to prosecute illegal gambling operations. Today, this antiquated policy puts the nascent legal market at a competitive disadvantage against offshore illegal operators, who do not pay any taxes and prey on vulnerable customers.
The AGA opposes the GRIT Act and will continue to educate Congress about why enacting bipartisan legislation to repeal the excise tax on legal sports betting operators is necessary to ensure we can effectively migrate Americans into the protections of the regulated market.
We look forward to working with Sen. Blumenthal, Rep. Salinas and other stakeholders to combat illegal gambling and address problem gambling in ways that do not further enshrine bad tax policy and give criminals a leg up,” he said.
Not surprisingly, the AGA backs a bill submitted by Nevada Rep. Dina Titus and Pennsylvania Rep. Guy Reschenthaler, aimed at repealing the excise tax entirely. Given the US Congress’ record for ineffectiveness in recent years, it seems unlikely that GRIT, or anything else, will be passed into law anytime soon.