State Taxes & Sports Betting

What’s happening? All states tax sports gaming revenue based on taxes on gross gaming revenue. Most states do not allow operators to take deductions.

Why is this important?  Colorado, Michigan, Pennsylvania, and Virginia allow specific deductions for promotions, losses, and/or federal excise taxes paid, aligning their tax more with a gross receipts tax.

How will this be important? Sports betting is going to expand, and successful tax systems will be replicated and tweaked. So treat this as your roadmap.

Tax Foundation | Large Spread in Tax Treatment of Sports Betting Operators