While Americans were obsessed with fantasy football this year, lawmakers in Washington were working hard to legalize sports betting.
On July 16, the House of Representatives passed H.R. 676, the Sports Wagering Law, with bipartisan support. Now that the bill is in the Senate, where it awaits approval, it’s time for sports bettors to take a deep breath and relax. It appears that in the coming weeks and months they will be able to place bets and win big.
If you follow sports betting, you know that the topic has been a point of discussion for years. Despite the legality of wagering on sporting events, Congress has never managed to pass a bill that would allow for its full legalization.
Why? Simply put, lawmakers don’t feel that the revenues generated from wagering on sports are a good use of taxpayer dollars. And, given the billions of dollars at stake, they have a point. After all, just think about what a $100 wager on a game could mean.
It’s important to note that the proposed legislation before Congress does not legalize sports gambling. Rather, it facilitates sports betting by setting up a federal tax system that treats sports wagering as a business expense. The current law prohibits federal agencies from taking part in sporting events, making it difficult for Americans to place bets on their favorite sports teams. With this new law, gamblers will now be able to legally wager on sporting events, generating an estimated $150 million in new annual revenue.
How Taxes Are Paid On Casino Winnings
One of the major issues that plagued the implementation of the Unlawful Internet Gaming Enforcement Act is how to pay for the enforcement of this new law. Obviously, the government can’t ask taxpayers to help foot the bill for police action in shutting down illegal sports books and casinos, can they?
The good news is that the IRS developed a system that allows for the legal gaming industry to self-insure against the risk of counterfeiting, fraud, and money laundering. It’s a program called the Legal Intermediary Program, and it allows for financial institutions to act as a go-between for online and offline businesses. In other words, the financial institutions that participate in the program are required to establish a trust fund that will pay for the cost of the law enforcement action should any of their customers engage in any form of fraudulent activity.
This is an important aspect of the bill because it ensures that illegal sports books and casinos will have to pay for their actions. It also helps to ensure that the public is protected from the harmful effects of gambling.
It’s important for prospective bettors to be aware of the risks associated with sports betting. Just because the books are legal doesn’t mean that they are ethical or that the operators are regulated by a reliable entity. Keep that in mind and make sure that you’re aware of the various risks before you begin casting your lot with any particular establishment.
Congress has finally acted on this issue, and it’s about time. Years of grassroots activism spearheaded by the American Gaming Association finally paid off, and the passage of this bill will undoubtedly help to generate a new wave of support for the sports betting community. It will be interesting to see how this bill impacts the sports betting industry in the months and years to come.