Skip to content

2023 state legislatures break even on efforts to tax sports wagering 

Thomson Reuters Tax & Accounting  

· 5 minute read

Thomson Reuters Tax & Accounting  

· 5 minute read

With the recent start to the NFL season, sports wagering is a popular topic of conversation among football fans. It’s also been a popular topic of debate in state legislatures. Earlier this summer, Kentucky, North Carolina, and Vermont all enacted laws that legalize and tax sports wagering activities. Similar efforts in Texas, Missouri, and Georgia failed to garner enough support. Here’s a rundown: 

States with laws on sports wagering taxes

Kentucky House Bill 551, which became effective June 29, 2023, imposes an excise tax on persons licensed by the Kentucky Horse Racing Commission to conduct sports wagering. A 9.75 percent tax rate is imposed on the adjusted gross revenue from sports wagers placed at a licensed track and a 14.25 percent rate is applied to the adjusted gross revenue from sports wagers placed online via websites or mobile applications.  

“Adjusted gross revenue” is defined as “ the total sum of wagers collected on all sporting events, less winnings paid to participants in the contest and all excise taxes paid pursuant to federal law.”  

North Carolina House Bill 347, effective January 8, 2024, levies a tax at an 18 percent rate on the gross wagering revenue of interactive sports wagering operators.  

“Gross wagering revenue” is defined as “the total of amounts received by an interactive sports wagering operator from sports wagers … less the amounts paid as winnings before any deductions for expenses, fees, or taxes.” 

In June, Vermont House Bill 127 legalized sports wagering in Vermont. The law requires each operator to pay to the Department of Liquor and Lottery a revenue share that is determined through competitive bidding. The revenue share may not be less than 20 percent of adjusted gross sports wagering revenue. 

Unsuccessful attempts to tax sports wagering

Attempts to legalize and tax sports betting did not succeed everywhere. For example, the Texas House of Representatives approved House Bill 1942 but it died in the Senate and never became law. The bill would have legalized sports betting and imposed a 10 percent tax on the adjusted gross wagering revenue of interactive sports wagering operators. The Texas legislature is not expected to meet again until 2025. 

Similarly, in Missouri, House Bill 556 passed the House but did not gain approval in the Senate. The legislation proposed to legalize sports betting and impose a 10 percent tax on the adjusted gross receipts received from sports wagering conducted by sports wagering operators. On September 8, 2023, initiatives were filed with the Missouri Secretary of State that seek to amend the Missouri Constitution by referendum to allow sports wagering and to tax it.  

Several sports betting laws were introduced in Georgia in 2023 but they all failed  

Thomson Reuters Checkpoint Edge recently launched a new 50-state tax chart that reflects taxes imposed on operators of sports wagering activities. In addition, we’ve launched 50-state charts on casino gambling taxes and fantasy sports contest taxes. Please contact your Checkpoint Edge sales rep for more information.

Start your free trial today.   

More answers