How a lobbying blitz made sports betting ubiquitous

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How a lobbying blitz made sports betting ubiquitous
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Association consultants predicted, for example, that Virginia could expect to collect an additional $57 million a year in tax revenue if it legalized mobile sports betting and applied a 15% tax rate. That’s what Virginia did, but in the last 12 betting months the state only raised $38 million.

Other states with large deficits include Connecticut, Michigan, West Virginia and Wyoming. Overall, in the 14 jurisdictions that allow mobile sports betting and have tax rates within the range provided by the gambling association, tax revenue over the past 12 months has been nearly $150 million lower than the group’s forecast of $560 million, the Times found.

The association defended its estimates. He noted that he sometimes quoted lower estimates of the size of the illegal gambling market. And the group argued that it was too early to say how much would be staked or how much states would collect in taxes in the future and that as the market matured, tax revenue would increase. The association also said some states’ restrictions on college sports betting resulted in lower-than-expected revenues.

But another reason for the shortfall, the group conceded, was that some states had granted the gambling industry’s request for a generous tax exemption.

To attract customers to the game, companies regularly offer “free bets” and other promotions sometimes totaling thousands of dollars. Bettors can use these credits to place bets without putting their own money on the line.

At least seven states, as well as Washington, DC, have agreed to let businesses fully deduct such promotional expenses from their taxable income. Several other states have allowed partial deductions.

In Colorado, Michigan and Pennsylvania this year, free bet giveaways were so generous in February – Super Bowl month – that promotional spending exceeded revenue for many platforms, forcing them to cope, at most , to tiny tax bills that month. , according to SportsHandle.

nytimes

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