The American Gaming Association opposes a federal bill to fund problem gambling programs

Increase in required funding

The leading gambling industry advocacy and lobbying group in the United States has spoken out against a federal law that would earmark a portion of sports betting taxes for problem gambling services. The Gambling Addiction Recovery, Investment, and Treatment (GRIT) Act was introduced last Thursday by Sen. Richard Blumenthal (D-Connecticut) and Rep. Andrea Salinas (D-Oregon).

The bill would redirect half of the 0.25% federal tax on legal sports betting to the Substance Abuse Prevention and Treatment Block Grant Program and the National Institute of Drug Abuse.

The federal government collected nearly $235 million from the small tax in 2022.

“Gambling addiction harms countless families, children and communities in Oregon and across America. But unlike alcohol and drug addiction, there is currently no federal funding dedicated solely to stopping problem gambling,” Salinas said.

Because the money would come from an existing tax, no new taxes would need to be created to fund the programs. Managing the funds would utilize existing programs and procedures within the Department of Health and Human Services, eliminating the need for a new layer of bureaucracy.

“Targeted federal funding to directly combat gambling problems will provide much-needed support, resources, and treatment for those suffering from gambling addiction.” As the number of Americans suffering from gambling addiction increases, legislation like the GRIT Act is needed more than ever.” said Blumenthal.

AGA wants taxes to be abolished completely

However, the American Gaming Association (AGA) doesn't like the GRIT Act at all.

“Congress established the federal excise tax on sports betting in the 1950s as a tool to prosecute illegal gambling activities,” said Chris Cylke, AGA vice president of government relations. “These antiquated policies now leave the emerging legal market at a competitive disadvantage compared to illegal offshore operators who pay no taxes and exploit vulnerable customers.”

Presumably, Cylke means that the 0.25% tax makes it more likely for US-based, regulated gaming companies to raise their prices to offset the tax (because of course large companies have to pass on all expenses to their customers). However, as mentioned, no new taxes will be created and the current sports betting tax will not be increased – the funds will only come from the existing tax.

So it sounds like the AGA is taking this opportunity to argue against the tax again.

Rep. Dina Titus (D-Nevada), co-chair of the House Congressional Gaming Caucus, has also spoken out against the GRIT Act, calling it “superfluous” because of taxes and fees that sportsbooks and casinos already pay for used to treat gambling problems.

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