Sports Betting Summit reveals tax issues with betting expansion
January 10, 2019 8:59 AM
by Dave Dye
Taxes have become and will continue to be a major issue with the expansion of legalized sports betting around the country.
“This is one of the hard things that people don’t realize,” legendary Las Vegas bookmaker Jimmy Vaccaro said Wednesday during a sports-betting summit at the South Point Hotel and Casino in Las Vegas. The Seminar was presented by VSiN, SeventySix Capital and ASU’s Global Sports Institute. “There are two taxes that we pay. We pay a federal tax of 0.25 percent (on the total handle) and a state tax (on gross revenues).
“Gavin (Maloof) and his brothers came in and made a bet for a million dollars (on Floyd Mayweather to beat Conor McGregor). I think it cost us $2,700 to take the bet. Forget whether you win or lose, they tax (federally) on the amount of money that you write. It was going to cost us $2,700 to book the bet.”
While Nevada’s tax rate is 6.75 percent on gross revenues, other states just entering the market are considerably higher. Pennsylvania, for instance, is a whopping 36 percent.
Vinny Magliulo, Sports Book Director for Gaughan Gaming, said that type of tax rate is a serious concern for new states offering sports betting.
“You can’t kill it before it’s even born in some places,” Magliulo said. “Over-taxation could definitely work against the industry.”
Former NBA Commissioner David Stern was expected to be the event's keynote speaker, but he was a late scratch because of a family emergency.
Darren Rovell, Senior Executive Producer of Action Network, predicted during the summit that 13 states will have legalized sports betting by the end of 2019, 20 by the end of 2020, and 31 by the end of 2021.
Eight states - Nevada, New Jersey, Pennsylvania, Mississippi, West Virginia, Delaware, Rhode Island and New Mexico - currently offer legalized sports betting.