Encouraging Investment Through Sound Tax Policy
We advocate for the industry by working with Congress, the U.S. Department of the Treasury, and the Internal Revenue Service to ensure fair industry treatment specific to federal tax regulations and laws.
Increasing Federal Slot Tax Threshold
The $1,200 slot tax reporting threshold was set in 1977 and is overdue
for an update to a higher level to address decades of inflationary effects.
Over the past several years, AGA has worked with allies on the Hill and industry stakeholders to continue to press the IRS to increase the threshold through regulation. In the absence of regulatory action Congress has also stepped up with legislation, the Shifting Limits on Thresholds (SLOT) Act, that would mandate an increase in the threshold.
Repealing Federal Excise Tax on Sports Betting
The Internal Revenue Code currently imposes a federal excise tax of 0.25 percent on the amount of any legal sports wager with a sportsbook, as well as an additional $50 annual head tax for every employee engaged in receiving wagers for or on behalf of any legal sports betting operator. This tax was established in the 1950s, not as a revenue source, but rather as a tool for prosecuting illegal bookmaking operations that didn’t pay the tax.
Currently, this tax serves no dedicated purpose and represents an added operating cost to legal sportsbooks that illegal operators do not pay, further impeding customers’ move away from the predatory, illegal market to safe, regulated sports betting channels. Congress can help empower the success of a safe, regulated marketplace by repealing the federal excise tax that unnecessarily disadvantages legal sports betting operations.
Encouraging Investment Through Sound Tax Policy
Reasonable corporate tax policy allows the gaming industry to continually make investments in our world-class entertainment facilities, experiences, and technologies. Our ability to innovate often requires borrowed capital to accomplish significant projects. It’s critical to preserve interest expense deductibility and ensure the tax benefits attributed to capital and intellectual property expenditures are maintained.
Gaming innovation also depends on robust research and development. Securing a permanent refundable research and development tax credit would permit gaming equipment manufacturers and suppliers to plan for the long term while investing in cutting-edge technologies, particularly in the area of computer software.