AGA Opposes GRIT Act: Federal Sports Betting Excise Tax Controversy

The American Gaming Association (AGA) stands firmly against the GRIT Act, triggering a nationwide debate on the allocation of federal sports betting excise tax. Discover the compelling arguments and implications in this contentious issue.

AGA’s Opposition to GRIT Act

In a significant move, the American Gaming Association (AGA) has publicly opposed the GRIT Act, a bill designed to allocate federal sports betting excise tax funds for responsible gaming (RG) projects. This stance places AGA in direct opposition to the National Council on Problem Gambling, a leading advocate for responsible gaming.

The AGA’s opposition is rooted in its long-standing commitment to repealing the federal excise tax on sports betting. This tax was initially introduced in the 1950s as a means to combat illegal gambling operations. However, AGA’s perspective has evolved over the years, viewing this tax as a relic of the past, particularly when organized crime controlled significant portions of the US gaming industry.

Antiquated Tax Policy and Competitive Disadvantage

Chris Cylke, AGA’s Senior Vice President of Government Relations, emphasized the historical context of the federal sports betting excise tax. He noted that the tax was conceived as a tool to prosecute illegal gambling operations, a scenario vastly different from today’s legal and regulated sports betting landscape.

Cylke argues that this outdated policy places the emerging legal market at a competitive disadvantage when compared to offshore illegal operators. These unregulated entities avoid taxation, preying on vulnerable customers while undercutting the legal industry’s ability to thrive.

The AGA believes that repealing the excise tax on legal sports betting operators is crucial to ensure a level playing field and effective regulation. They assert that Americans should be encouraged to participate in the protections offered by the regulated market, rather than being enticed by offshore illegal operators.

State Gaming Taxes and Problem Gambling Support

AGA further contends that state gaming taxes already play a substantial role in funding various problem gambling services. This includes support for those affected by problem gambling arising from the newly legalized sports betting and iGaming sectors.

They argue that there has never been a better time in history for attention and financial resources dedicated to addressing problem gambling. With the expansion of legal gambling activities, substantial investments have been made in support systems.

A Call for Bipartisan Legislation

In closing, AGA expresses its commitment to educating Congress on the necessity of enacting bipartisan legislation to repeal the excise tax on legal sports betting operators. Their goal is to ensure the effective migration of Americans into the regulated market’s protective embrace.

The AGA looks forward to collaborating with Senator Blumenthal, Representative Salinas, and other stakeholders to combat illegal gambling effectively. Their aim is to address problem gambling in ways that not only preserve good tax policy but also eliminate opportunities for criminals to exploit the system.

The GRIT Act and Its Objectives

The Gambling Addiction, Recovery, Investment, and Treatment (GRIT) Act, at the center of this controversy, seeks to divert 50% of the federal sports betting excise tax revenue. Of this, a significant 75% allocation is dedicated to addiction prevention and treatment, while the remaining 25% is earmarked for research grants.

This legislation has been introduced in both congressional chambers and has garnered considerable attention. It now rests in the House Committee on Energy and Commerce and the Senate Committee on Health, Education, Labor, and Pensions.

In summary, the AGA’s opposition to the GRIT Act sparks a crucial debate about the allocation of federal sports betting excise tax funds. The clash between preserving historical tax policy and fostering a fair, competitive, and well-regulated market raises essential questions about the future of responsible gaming in the United States.