Legislators present framework for new states introducing online gambling
A framework for online gambling has been produced by legislators in states where the activity is already permitted as a guideline for additional states considering its introduction.
Crucially, the model legislation drawn up by the National Council of Legislators would set the tax rate bar at 15% to 25%, while outlawing the use of credit cards for betting purposes.
The draft will be on the table next week in New Orleans when the council meets for its scheduled winter gathering.
At present, seven U.S. states allow legal online casino games (Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, Rhode Island, and West Virginia). Nevada offers internet poker but no other online casino games, while the sportsbook situation is different again.
At present, online sportsbooks are available in 39 states, including Washington D.C. but a further 8 states allow wagers on sports in certain physical locations.
The draft framework largely mirrors the approach taken in New Jersey, where 95% of the measures are enacted, and is held up as an example of good governance. It is said to be the basis for individual states to establish their own legislation, based on local needs rather than a one-size fits all approach.
In almost every state yet to legislate on gambling, talks have already taken place but there has been no breakthrough.
“Many states have been discussing this, but were having a hard time getting it across the finish line,” said Shaun Fluharty, a West Virginia Democratic state representative who serves as president of the national legislators’ council.
“We’re trying to put together some best practices for them,” he added.
#ComplianceUpdates #LatestNews NCLGS Publishes Draft Model Internet Gaming Act https://t.co/2mq2R2NGrJ pic.twitter.com/VMtDCBURc5
— Gaming_Americas (@GamingAmericas) December 3, 2024
U.S. betting tax rates range from 15% to 54%David Rebuck, a retired expert who was previously the head of New Jersey’s gaming enforcement office advised the group of legislators on the proposed legislation.
Reflecting on the similarity to The Garden State’s approach to gambling governance, he said the draft is “a great start that builds on what is already in place and operational elsewhere.”
The tax rate range of 15 to 20% is not a demand as it is above what some states have in place, but far less than some others. For example, Pennsylvania taxes online sportsbooks at 36% and internet slots at 54%. That contrasts starkly with West Virginia’s rate of 15%.
The national average for online gambling tax is 19%.
One thing to note is there is little desire or prospect of a national or federal standard for gambling taxes. States are generally left to decide their own approach with previous overarching plans falling.
It is not a priority at the White House either, with President-elect Donald Trump known to want states to exercise their autonomy on such important questions, including drivers of revenue.
The proposed bill does offer substance in calling for strict oversight of online gambling to protect users and to eradicate dubious individuals and organizations from the betting system.
Earlier this year, it was reported that $9.5 billion was raked in from illegal gambling in New York, New Jersey, and Minnesota.
Image credit: Via Midjourney
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