Wyoming is the latest state to consider raising the tax rate on sportsbooks, as the Wyoming Legislature’s Select Committee on Capital Financing and Investments proposed three tax hikes on gambling last week, with mobile sports betting being chief among them.
Doubling the Tax
Wyoming is the least populated state in the union, with less than 588,000 people calling the Cowboy State home. It also has a minimal sports betting tax of 10% on sportsbooks’ revenues, but that could be changing soon, as the Committee has proposed doubling the tax rate on sports betting platforms to 20% this year and increasing the tax on skill-based amusement games from 20% to 25%.
Lastly, historical horse racing machines in the state would be subject to a tax of 1.5% to 2.5%, with an additional 0.4% reserved for the state’s breeders’ fund. It’s a multi-pronged approach for generating more revenue for the state, with the state’s mobile sportsbooks absorbing the brunt of the tax increases.
Committee Chairperson Tara Nethercott believes the time is now for an increase, 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.”
Oversight, Regulation, and Social Responsibility
Nethercott has also stated that the gaming industry needs more oversight and regulatory guidelines, stating that she believes it “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.”
Nethercott also pivoted to addressing problem gambling and subsidizing those resources that are normally in place for those most vulnerable. And although the problem hasn’t reared its head yet, as gaming increases in popularity, so too will the level of addiction.
“I think you will soon. In light of the continued proliferation of gaming, that’s not going to go away,” Nethercott said. “Right now, it doesn’t make sense, but in two, three years, will it?”
Industry Responds
One of the last things Nethercott said before she ended was, “No doubt we’ll hear from folks from the online sports wagering industry.”
And it didn’t take long for the industry trade group, the Sports Betting Alliance (SBA), whose member companies are bet365, BetMGM, DraftKings, Fanatics, and FanDuel, to express its outrage that a modest market would be hiking the tax rate.
SBA spokesperson Nathan Click stated, “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.”
Yet, Click did say that the organization would negotiate with the legislature, stating, “We look forward to collaborating with the legislature and educating members on our business.”
