BUSINESS

New US bill seeks to tax games of chance

TAGs: Fair Tax Act of 2017, united states of america

A senator is pushing a bill that would require companies offering games of chance in the United States to pay a 23 percent tax.

Sen. Jerry Moran (R-Kansas) opened the 115th Congress with a proposal that defines “chance” and includes special tax treatment for gaming operators, a group that may include Nevada sportsbooks and daily fantasy companies, ESPN reported.

New US bill seeks to tax games of chanceIntroduced last Jan. 3, the 132-page bill—titled “Fair Tax Act of 2017”—has special provisions for gaming “sponsors” and also defines “chance” as those that includes bets or wagers involving “(1) a random or unpredictable event or (2) an event over which neither the gaming sponsor nor the person purchasing the chance has control over the outcome.”

Moran’s bill, however, does not specify if the so-called “special tax treatment” will apply to daily fantasy sports operators or to Nevada sportsbooks. Operators like FanDuel and DraftKings have been consistent in defining  daily fantasy sports games as skill-based, even though “[n]o court has directly addressed whether fantasy sports contests are games of skill,” according to a 2014 letter to FanDuel released during litigation between the company and the New York Attorney General.

Traditional sports betting, meanwhile, involves skill, according to both the NFL and the U.S. Justice Department. However, New Jersey Rep. Frank Pallone has already announced a full review of the country’s federal sports gambling laws, with a goal of possibly introducing new legislation.

Back in October, the New Jersey congressman said federal gambling laws “need a wholesale review to see how they can actually work together and create a fairer playing field for all types of gambling, both online and offline, including sports betting and daily fantasy sports.”

Beyond gaming, Moran’s proposed bill has quite broad provisions. According to the report, the legislation is focused on “repealing” the federal income tax and “abolishing” the U.S. Internal Revenue Service. The bill would enact “a national sales tax to be administered primarily by the States.”

Moran’s bill is still at a preliminary stage. No hearing or vote on the proposed legislation has been scheduled, according to the report.

Comments

views and opinions expressed are those of the author and do not necessarily reflect those of CalvinAyre.com