{"id":617,"date":"2026-03-20T19:15:12","date_gmt":"2026-03-20T20:15:12","guid":{"rendered":"https:\/\/cerulepillar.com\/?p=617"},"modified":"2026-03-25T13:28:00","modified_gmt":"2026-03-25T13:28:00","slug":"5-federal-sports-betting-tax-could-raise-nearly-100b-says-policy-group","status":"publish","type":"post","link":"https:\/\/cerulepillar.com\/index.php\/2026\/03\/20\/5-federal-sports-betting-tax-could-raise-nearly-100b-says-policy-group\/","title":{"rendered":"5% Federal Sports Betting Tax Could Raise Nearly $100B, Says Policy Group"},"content":{"rendered":"<ul>\n<li><strong>The federal tax on sports wagering is just 0.25% today<\/strong><\/li>\n<li><strong>If it was raised to 5%, it\u2019d generate $97 billion in revenue over a decade<\/strong><\/li>\n<li><strong>At 5%, it\u2019d be the fifth-largest federal excise tax<\/strong><\/li>\n<\/ul>\n<hr \/>\n<p>Plenty of states aren\u2019t shy about raising <a href=\"https:\/\/www.casino.org\/news\/michigan-most-likely-state-to-raise-igaming-sports-betting-taxes\/\">sports betting taxes<\/a> or considering such moves. It may be time for Uncle Sam to consider doing the same.<\/p>\n<figure id=\"attachment_379353\" aria-describedby=\"caption-attachment-379353\" data-style=\"width: 858px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" class=\"wp-image-379353 size-post-thumbnail-858xAUTO lazyload\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" alt=\"excise tax problem gambling POINTS Act\" width=\"858\" height=\"572\" data-src=\"https:\/\/cerulepillar.com\/wp-content\/uploads\/2026\/03\/shutterstock_2557865715-858x572-1.jpg\"><figcaption>An aerial view of the United States Capitol Building in December 2024 in Washington, DC. Significant revenue would be generated with a 5% sports betting tax..(Image: Shutterstock)<\/figcaption><\/figure>\n<p>Currently, the federal excise tax on sports betting is just 0.25%, but the Bipartisan Policy Center argues that <a href=\"https:\/\/bipartisanpolicy.org\/issue-brief\/should-congress-increase-taxes-on-sports-betting\/\">if that rate is boosted to 5%,<\/a> making it the fifth-largest federal excise tax, $97 billion in revenue could be generated over a decade. Take it to 10% and the sports betting tax would be the second-largest excise tax behind only the gas levy and it\u2019d raise $182 billion over 10 years.<\/p>\n<figure id=\"attachment_380120\" aria-describedby=\"caption-attachment-380120\" data-style=\"width: 858px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" class=\"wp-image-380120 size-post-thumbnail-858xAUTO lazyload\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" alt=\"sports betting tax\" width=\"858\" height=\"758\" data-src=\"https:\/\/cerulepillar.com\/wp-content\/uploads\/2026\/03\/a-5-tax-on-sports-bets-would-be-the-5th-largest-federal-excise-tax-858x758-1.png\"><figcaption>A 5% sports betting tax would generate significant federal revenue. (Image: Bipartisan Policy Center)<\/figcaption><\/figure>\n<div class=\"callout\">\n<p>The policy group points out that if Congress were to pass a law raising the federal sports betting tax to 5%, it\u2019d likely result in the number of bets placed declining 4% on a yearly basis. If the more ambitious 10% tax hike was implemented, the amount of placed wagers could decline by 10%.<\/p>\n<\/div>\n<p>Some states that have implemented <a href=\"https:\/\/www.casino.org\/news\/illinois-sports-betting-tax-resulting-in-fewer-bets-more-revenue\/\">sports wagering tax increases<\/a> have experienced declines in the number wagers placed, but no material declines in handle or collected revenue. That is to say that when taxes are passed onto bettors, they may bet less, but they make up for the decreased volume with increased wager size.<\/p>\n<h2>Federal Sports Betting Tax not Capitalizing on Post-PAPSA World<\/h2>\n<p>Since the 2018 <a href=\"https:\/\/www.casino.org\/news\/ohio-officials-weigh-in-on-1b-net-revenue-record-at-racinos\">Supreme Court ruling<\/a> on the Professional and Amateur Sports Protection Act (PAPSA), regulated sports bets placed in this country swelled 24f-fold in dollar terms, but federal tax policy isn\u2019t capitalizing on that growth. It\u2019s actually been declining for decades.<\/p>\n<blockquote class=\"main-blockquote\">\n<p>Congress reduced the tax rate on legal wagers from 10% to 2% in 1974, and from 2% to 0.25% in 1982. The 1982 law also added a separate 2% tax on illegal wagers. The 0.25% rate for legal wagers and 2% rate for illegal wagers have been in place since then,\u201d according to the Bipartisan Policy Center.<\/p>\n<\/blockquote>\n<p><strong>The policy group also notes that a federal <a href=\"https:\/\/www.casino.org\/news\/illinois-sports-bets-plunge-by-5m-as-operators-respond-to-higher-taxes\/\">per bet tax<\/a> of five cents would generate significantly less revenue than the flat 5% levy<\/strong>.<\/p>\n<p>\u201cIt projected this option would raise a much smaller amount of revenue, only $1.3 billion from FY2027-2036, than the 5% ad valorem tax, but in the long run its impact could be greater by reducing the number of bets: While overall betting volume might not decrease as much under a $0.05 tax as a 5% tax, gamblers could place fewer higher-dollar bets to reduce the tax\u2019s effects under this option,\u201d notes the Center.<\/p>\n<h2>Revenue Would Rise Even if Bettors Respond<\/h2>\n<p>Illinois is instructive in terms of how bettors respond to increased taxes. Last year, the state implemented a levy of <a href=\"https:\/\/www.casino.org\/news\/illinois-again-hikes-sports-betting-taxes-draftkings-fanduel-to-bear-brunt\/\">25 cents per bet is applied on the first 20 million bets<\/a> booked, with that figure doubling to 50 cents for every bet after 20 million.<\/p>\n<p>That\u2019s been passed onto consumers in the form of transaction costs (DraftKings, Fanatics and FanDuel) or increased minimum bet size (other operators). Data indicate the number of bets placed in the state have declined in recent months, but handle has not. The Bipartisan Policy Center said that even if bettors reacted to a 5% federal tax, the government would still raise substantial revenue.<\/p>\n<p><strong>\u201cHowever, even a significant response from gamblers\u2014say, an <a href=\"https:\/\/www.britannica.com\/money\/elasticity-economics\">elasticity<\/a> of -3 instead of -0.5, which would translate to a 3% decrease in sports-betting volume for every 1% increase in after-tax price\u2014would still generate tens of billions of dollars in revenue over 10 years,\u201d according to the group.<\/strong><\/p>\n<p>The post <a href=\"https:\/\/www.casino.org\/news\/5-federal-sports-betting-tax-could-raise-nearly-100b\/\">5% Federal Sports Betting Tax Could Raise Nearly $100B, Says Policy Group<\/a> appeared first on <a href=\"https:\/\/www.casino.org\/news\">Casino.org<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The federal tax on sports wagering is just 0.25% today If it was raised to 5%, it\u2019d generate $97 billion in revenue over a decade At 5%, it\u2019d be the fifth-largest federal excise tax Plenty of states aren\u2019t shy about raising sports betting taxes or considering such moves. It may be time for Uncle Sam&#8230;<\/p>\n","protected":false},"author":1,"featured_media":483,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[10],"tags":[],"_links":{"self":[{"href":"https:\/\/cerulepillar.com\/index.php\/wp-json\/wp\/v2\/posts\/617"}],"collection":[{"href":"https:\/\/cerulepillar.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cerulepillar.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cerulepillar.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/cerulepillar.com\/index.php\/wp-json\/wp\/v2\/comments?post=617"}],"version-history":[{"count":3,"href":"https:\/\/cerulepillar.com\/index.php\/wp-json\/wp\/v2\/posts\/617\/revisions"}],"predecessor-version":[{"id":621,"href":"https:\/\/cerulepillar.com\/index.php\/wp-json\/wp\/v2\/posts\/617\/revisions\/621"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cerulepillar.com\/index.php\/wp-json\/wp\/v2\/media\/483"}],"wp:attachment":[{"href":"https:\/\/cerulepillar.com\/index.php\/wp-json\/wp\/v2\/media?parent=617"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cerulepillar.com\/index.php\/wp-json\/wp\/v2\/categories?post=617"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cerulepillar.com\/index.php\/wp-json\/wp\/v2\/tags?post=617"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}