Gambling tax in the USA to be abolished

In order to prevent licensed providers from being disadvantaged, two US politicians have proposed abolishing the gambling tax in the USA. In the land of unlimited opportunities, there are of course other taxes in addition to the gambling tax that should be retained. But how sensible is the abolition of the gambling tax and could the plan also be a model for Germany?

If a bipartisan bill by two US senators has its way, the gambling tax in the USA could soon be at risk of being abolished. Specifically, the two senators Cindy Hyde-Smith and Catherine Cortez Masto have proposed abolishing the special tax completely. The aim is not to put licensed providers at an additional disadvantage compared to online casinos.

Does the US gambling tax fuel the black market?

According to the two politicians, the current gambling tax leads to licensed providers being treated unfairly. Compared to illegal providers, they have a competitive disadvantage and players are tempted to play on the black market because of the gambling tax. After all, no gambling tax is levied here. At Casinova.org, we also asked ourselves last summer whether less regulation would lead to fewer illegal offers.

Of course, the gambling companies welcome the two senators’ plans. A few weeks ago, another US senator proposed reforming the gambling tax and, among other things, investing the revenue from the tax in the interests of player protection.

How high is the current gambling tax in the USA?

The current situation in the USA is that licensed providers have to pay a gambling tax of 0.25% on the stake to the state. Similar to Germany, this is a stake tax, not a tax on gross gaming revenue as usual. For this reason, the current gambling tax is placing an enormous burden on gambling companies, which, according to industry representatives, leads to an additional burden of 5%. Back in February 2022, we at GambleJoe reported on the confusion surrounding the 5.3% gaming tax in Germany.

The US Gambling Association welcomes the abolition of the national gambling tax and is of the opinion that the abolition will ultimately make the legal gambling market more attractive and therefore safer. In addition, the US Senators are also convinced that a more attractive gambling market would also create new jobs and ultimately strengthen the economy.

The fact that a tax on stakes is an enormous burden for operators and players is clearly shown by the example of Germany. In this country, the player tax is currently 5.3% on stakes and is therefore significantly higher than the gambling tax in the USA, which is now to be abolished.