Change Expected to Chase Off Big Spenders
The number of bettors affected by this change will be small, but they make up a big part of the revenue generated by the industry. That makes them a valuable commodity for operators, who use that money to improve the platform for all customers. If they end up being chased away, sportsbooks will feel the loss and have to find ways to replace the lost revenue.
While the bill’s goal is to steer big spenders towards other industries, some believe it will lead them to seek out unregulated offshore sportsbooks to place their wagers. This not only increases the risk of problem gambling, but also means states won’t receive any tax revenue from their betting.
This is a net loss for the US, prompting US Rep. Dina Titus of Las Vegas to discuss the introduction of a bill to overturn the tax change.
White House Protecting Prediction Markets
The tax bill isn’t the only way President Trump and DC politics are affecting the sports betting industry.
The President has nominated a new head for the Commodity Futures Trading Commission, which regulates sports prediction markets. He is connected to Kalshi, one of the industry’s most prominent operators, and openly supports the industry. If his nomination succeeds, it will likely mean the sector will be protected, despite fierce resistance from most states.
These controversial platforms enable customers to utilize their investment accounts to purchase “contracts” based on the outcome of a sports event. While this works similarly to sports betting, US law currently classifies it as a form of commodity trading, meaning only the CFTC has regulatory authority.
AGA Applauds Tax Change
The American Gaming Association, which lobbies on behalf of the casino industry, released a statement praising the tax changes in the bill. They shared that they believe the bill will significantly benefit the industry, despite the objections of key allies like Rep. Titus.
"We commend congressional leaders on the passage of the One Big Beautiful Bill Act. Our industry's ability to sustain quality jobs and deliver economic benefits is significantly enhanced by the tax policies of OBBBA that support consumers, encourage business innovation and investment, and strengthen U.S. competitiveness. We look forward to President Trump's expected signing and will work closely with Congress in the coming months to address the changes to wagering deduction losses and further modernize the tax code," the statement from the AGA read.
