Wyoming Considering Raising Taxes on Sports Betting

Wyoming is the latest in a series of tax-hike proposals being considered by states at the legislative level in sports betting and gambling.

Tax Push

States are mimicking each other when it comes to getting a bigger piece of the sports betting pie during this legislative session. After Illinois made headlines by implementing a 25-cent to 50-cent transaction fee on all sportsbooks, coming off the heels of its revenue increase last year, the Cowboy State is now considering a tax hike of its own.

Wyoming’s Legislature’s Select Committee on Capital Financing and Investments has suggested three hikes on gambling last week on multiple gaming industries, including sports betting. Specifically, the Committee has proposed doubling the tax rate on sports betting platforms from 10% to 20% this year and increasing the tax on skill-based amusement games from 20% to 25%.

Lastly, historical horse racing is in the Committee’s crosshairs as well, proposing a point increase from 1.5% to 2.5%, which doesn’t take into account the additional 0.4% reserved for the state’s breeders’ fund. It is a three-pronged approach to generating greater tax proceeds for the state off the backs of betting platforms and other mechanisms.

Calls for Oversight and Regulation

Committee Chair Tara Nethercott was leading the charge on the increases, stating, “I think the state of Wyoming has been quite generous to the players in this space,” said Nethercott during the discussion on skill-based games, “giving them almost exclusive access to the market, in a proliferated rate — having infiltrated every block of all our communities.”

Nethercott also demanded more oversight and regulations of the gambling industry in her state.

She believes gaming “has benefitted from modest regulation and little oversight. As the industry has grown exponentially in recent years, Wyoming needs to establish enhanced oversight and revenues to match the growing needs from impacts in our communities.”

Addressing Problem Gambling

Nethercott also responded to calls for measures to be taken to address gaming addictions.

“I think you will soon. In light of the continued proliferation of gaming, that’s not going to go away,” she said. “Right now it doesn’t make sense, but in two, three years, will it?”

Sports Betting Alliance Responds

The industry trade group, the Sports Betting Alliance, whose member companies are bet365, BetMGM, DraftKings, Fanatics, and FanDuel, was among the first to discourage the idea of a tax hike. In response to the measure being contemplated, the group said that the sports betting margins were low to begin with, as 90% of the wagering money is returned to the bettors. Much of the remaining profit is reinvested in technology, marketing, and sponsoring responsible gaming marketing.

“Customers in states that have raised sports betting taxes wind up with a more costly sports betting experience — from worse promotions to decreased payouts,” said Click. “These types of changes also make legal sports betting products less able to compete against illegal and offshore sports betting operators that pay zero in taxes but are widely available online to bettors in Wyoming.”

Nevertheless, the organization stated that, “we look forward to collaborating with the Legislature and educating members on our business.”