Wyoming Latest State Mulling Online Sports Betting Tax Hike
Wyoming Latest State Mulling Online Sports Betting Tax Hike
Wyoming lawmakers are currently assessing the potential for an increase in the tax on online sportsbooks, a critical aspect of the growing online sports betting industry. Currently, these platforms contribute 10% of their revenue to state coffers, positioning Wyoming among the states with lower taxation rates within the broader online sports betting landscape.
- Wyoming lawmakers are considering raising the tax on online sportsbooks.
- Online sportsbooks currently direct 10% of their revenue to the state.
- Wyoming is the latest state to review an online sports betting tax increase.
As the trend of increasing sports betting taxes sweeps across the country, Wyoming is now at the forefront of this movement. The tax structure currently instituted allows both commercial online sportsbooks and in-person betting at tribal casinos. Notably, Wyoming’s mobile sports betting platforms are currently subject to a 10% tax on their gross wins, meaning the earnings retained after payouts.
This current tax rate may soon change. The Legislature’s Select Committee on Capital Financing and Investments confirmed recent reports indicating that Wyoming’s tax rate is around half the national average. Karen Vaughn, a fiscal analyst from the Legislative Service Office, indicated that states with legal online sports betting have an average tax rate of approximately 19%.
Wyoming’s reduced tax burden has lured sportsbooks into the state, as evidenced by their willingness to pay a licensing fee of $100,000 for a five-year period (renewals cost $50,000 for each subsequent five-year term). With a population of less than 600,000—making it one of the smallest states in the U.S.—the need for a competitive tax structure was underscored by sportsbook operators to incentivise their participation.
State Tax Hike Considered
Despite Wyoming’s relatively small size and inconsistent mobile connectivity, the state boasts a competitive online sports betting market featuring five operators: FanDuel, DraftKings, BetMGM, Caesars Sportsbook, and Fanatics. The newly branded ESPN Bet has also received approval from the Wyoming Gaming Commission, although it has yet to launch services.
Given the possibility that Wyoming may need to reconsider its tax strategies, Rep. Liz Storer (D-Jackson) proposed drafting a bill to raise the online sportsbook tax, potentially targeting an increase to 20%. However, there is speculation that this figure is merely a starting point and further adjustments may be considered.
It is important to note that any changes to the online sportsbook tax would not affect the existing 10% tax on revenue from tribal casino sports betting, which operates under Class III gaming compacts between Native American communities and state governance.
Commercial sportsbooks within Wyoming are expected to resist any proposed tax hikes. Currently, Wyoming ranks among the smallest sports betting markets concerning revenue, with annual takings from oddsmakers below $20 million. In multi-billion-dollar markets such as New York, the situation starkly contrasts, with net winnings exceeding $2 billion last year.
State Tax Hikes Nationwide
The conversation around tax hikes in Wyoming emerges on the heels of two substantial tax increases implemented in Illinois over the previous two years. Responses from major sportsbooks like DraftKings and FanDuel included a range of surcharges for online bets. Meanwhile, New Jersey is deliberating an increase of their 13% state tax on online sportsbook winnings, despite neighboring New York thriving under a substantial 51% tax regime—one of the highest nationwide.
In a similar vein, the Louisiana state legislature has recommended a jurisdictional tax revision, proposing an increase of the online sports betting tax from 15% to 21.5%, with the expectation of the governor’s approval.
Sportsbooks across the board argue that these tax hikes create competitive disadvantages compared to offshore sportsbooks, which operate without any taxation and are hence able to offer better odds along with more lucrative promotions and bonuses.
In summary, Wyoming is poised to make crucial decisions about its online sports betting tax structure, joining a nationwide trend where states are weighing their tax policies against the overarching profitability of legal gambling. With more than a handful of states considering whether to amend their taxation strategies, the outcomes may redefine the gaming landscape significantly across the United States.
