The federal excise tax on sports betting is one of those things that pretty much “just is.” You know, like the spelling of “Wednesday.” We don’t say “WED-nes-day.” We say “WENZ-day.” Nobody questions it. We just move on.
Pretty much the same for the excise tax. Oh, sure, we hear about sports betting taxes all day, every day, but the excise tax? It just quietly goes about its business, scraping 0.25% off the top of every bet. The Tax Foundation estimates it gobbled up some $374 million in 2024.
And that’s just the legal market.
Yes, illegal operators might also be paying, to the tune of 2% off the top. If that makes no sense to you, join the club. Apparently, the tax dates back to 1951, when legislators decided to slap a 10% tax on all sports betting in an effort to stamp it out of existence. The idea was relatively elegant: If you were running an illegal bookmaking operation, getting pinched for not paying taxes was an easier way for the feds to getcha.
It’s kinda-sorta worked, on both sides. There have been examples of illegal bookmakers ponying up the money, which over the years has been reduced to today’s 2%. Plenty of people have been hit for not paying the tax on their illegal activity.
And get this: In an effort to collect the cash, the IRS doesn’t drop the dime on these operators to local or federal authorities.
What a world.
It’s a woozy
So now we know a little bit about the tax. Next question: Where does the money go?
Well, much like socks in a dryer, it just kind of disappears. Goes right into the U.S. Treasury’s General Fund.
So when you make a $100 bet, 25 pennies wind up with Uncle Sam.
Does he use it to pay for the surgery of an infant with a heart defect whose parents just died in a car accident?
Perhaps.
Or maybe he uses it, I dunno, to buy bullets.
Could be either. Could be both. Could be neither.
Bottom line is the money just enters the churn. Poof!
Now, though, there’s a plan to un-woozy the money. There’s a plan to put the money to direct use. And I can say this with absolute certainty: It’s a plan.
It’s called the GAMBLER Act — short for Giving Alien Migrants Back through Lawful Excise Redistribution. It was just introduced in the U.S. House of Representatives by Rep. Michael Rulli (R-Ohio) and co-sponsored by Rep. Troy Nehls (R-Texas).
The gist? Instead of letting all that sports betting excise tax vanish into the abyss of the General Fund, this bill proposes rerouting it into a brand-new Border Enforcement Trust Fund. That fund would bankroll immigration enforcement operations — specifically the apprehension, detention, and deportation of individuals in the U.S. illegally.
According to the bill’s text, it costs more than $150 a day to house someone in ICE custody and, with detention averaging 55 days, the lawmakers backing the GAMBLER Act argue that taxpayers shouldn’t be footing the whole bill.
So under this plan, every time you fire off a $100 bet and five nickels get sent to the feds, that money would help fund a holding cell instead of disappearing into the bureaucratic ether.
As I said: It’s a plan.
It’s a silly plan
Say what you will about the politics of it all, this bill is complete nonsense. It’s not advocating for a new tax on citizens to pay for this, it’s not advocating for other countries to pay for this, it’s not forcing business to foot the bill.
It’s simply taking money that’s already being collected and putting a name on it.
It’s symbolic. It’s optics. It’s a nothingburger.
This isn’t even a “borrowing from Peter to pay Paul” situation. It’s more like Peter just paying for something he was buying anyway, and this purchase will make sure Paul gets his ass sent back to Guatemala.
The budget for ICE is $8 billion a year. They’re already $1 billion over budget. The — ahem — Big Beautiful Bill wants to add another $15 billion a year to ICE’s budget.
So let’s see … $374 million is what percentage of $23 billion … stand by …
It’s 1.6%. The bill would probably fund 1.6% of ICE’s budget. But the government already has the money.
As I said: silly plan.
Three other ideas
Of course, this isn’t the only plan for the federal excise tax.
You have the GRIT Act — short for Gambling addiction Recovery, Investment, and Treatment — introduced by Rep. Andrea Salinas (D-Oregon) and Sen. Richard Blumenthal (D-Connecticut). Their pitch? Reroute half of the revenue into programs for gambling addiction treatment and research. Most of the money would go to states for prevention and recovery efforts, with the rest funding federal studies.
Then there’s Rep. Dina Titus, the Las Vegas Democrat who’s been waging war on the tax itself.
She’s repeatedly introduced legislation to repeal the tax entirely, most recently through the Discriminatory Gaming Tax Repeal Act, co-sponsored by Rep. Guy Reschenthaler (R-Pennsylvania). Their argument? The tax is an outdated relic from a time when all sports betting was illegal — a rusty tool left over from a long-abandoned war.
And let’s not forget the Bipartisan Policy Center, which advocates a 1,900% increase on the tax to 5%.
So there’s one bill saying “use it better,” another saying “kill it entirely,” a third saying “more!” and now a fourth saying “use it to fund ICE detention beds.”
Four visions. One lonely quarter on every $100 bet.
And not one of them has much chance of becoming law.
So, who’s ready for a Modest Proposal?
This is a good idea, tbh
I call it BETS — The Bureau for the Enforcement of Threats to Sports. It’s a new federal agency, dedicated to protecting athletes from threats, harassment, and the unhinged wrath of bettors who think losing the over by half a point justifies doxxing a kicker who missed a 54-yard field goal.
It would be part cybercrime task force, part player protection squad, part public deterrent. I’m talking about staffed field offices, digital forensics teams that trace burner phones and VPNs, partnerships with sportsbooks, and coordination with local police and federal prosecutors. A 24/7 hotline for athletes getting harassed online because someone is sad their six-leg parlay didn’t hit.
I AI’d the cost of something like this. Figure 300-500 full-time employees, facilities, everything, Total cost per year? Low end was about $150 million, high end $250 million.
The excise tax more than covers it.
Besides, if we’re going to live in a country where a lousy day on the mound ends with your kids’ lives being threatened, the least we can do is make sure there’s a federal agency ready to knock on the right doors.
You want to throw someone out of the country? How about the guy who threatens to murder a 19-year-old with turf toe?
