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Two members of the U.S. Congress have introduced legislation to redirect some of the monies raised through the federal excise tax paid on each legal sports bet to fund problem gambling research and treatment.
The Gambling Addiction Recovery, Investment, and Treatment (GRIT) Act was introduced on Thursday (January 11) in the House by Representative Andrea Salinas of Oregon and in the U.S. Senate by Senator Richard Blumenthal of Connecticut, both Democrats.
“The growing legalization of sports and online betting, paired with the ability to place bets from your phone whenever you want have created a perfect storm for gambling addiction,” Blumenthal said in a joint statement with Salinas introducing the so-called GRIT Act.
“Dedicated federal resources to tackle problem gambling head-on will provide much-needed support, resources and treatment for those suffering from gambling addiction,” Blumenthal said. “As the number of Americans who are suffering from gambling addiction surges, legislation like the GRIT Act is needed now more than ever.”
“Our legislation will deliver much-needed resources to states and nonprofits, promoting new research and ensuring more people can get into treatment and recovery,” Salinas said.
The GRIT Act would specifically set aside 50 percent of the federal excise tax of 0.25 percent of the handle or total money wagered on sports in the U.S. for gambling addiction treatment and research.
Seventy-five percent of the funds set aside would go to states for gambling addiction prevention and treatment through the existing Substance Abuse Prevention and Treatment Block Grant program.
The remaining 25 percent in allocated federal tax dollars would go to the National Institution of Drug Abuse to fund grants for research into gambling addiction.
It is unclear exactly how much money the GRIT Act would allocate to each of the 50 states.
As of November 30, total U.S. handle on sports betting for 2023 was about $100.6bn, with the 0.25 percent excise tax raising an estimated $251.5m. That number should rise to around $275m as states begin reporting sports-betting handle figures for December.
Currently, all revenue raised by the excise tax is deposited into the general fund.
The legislation would also authorize spending for ten years and require the secretary of health and human services (HHS) to submit a report to Congress on the effectiveness of the program within three years of passage.
On Thursday, the Washington State Gambling Commission (WSGC) became the first regulatory agency to pass a measure expressing its official support for the GRIT Act.
The five-member commission also decided to ask the state’s congressional delegation to support the bill, and to lobby the Washington state legislature for a resolution of support.
Maureen Greeley, executive director of the Evergreen Council on Problem Gambling, expressed her support for the GRIT Act, telling commissioners that “this has been years of advocacy work to get here.”
Prior to the commission’s vote, Cole Wogoman, senior manager of government relations with the National Council on Problem Gambling (NCPG), said regulators in New Jersey and Ohio are also looking at the proposal.
Wogoman said the NCPG fears higher rates of gambling addiction will soon start to follow an increase in mobile sports betting. The annual cost of problem gambling is $7bn, while the NCPG also estimated 7m American adults suffer from gambling addiction.
“Importantly, this legislation does not increase taxes on Americans; it simply sets aside a funding stream for problem gambling treatment and research that will continue to increase as online sports wagering becomes more prominent,” according to the NCPG.
“This legislation does not increase government bureaucracy, but rather utilizes existing HHS programs and procedures.”
WSGC vice chair Julia Patterson asked Wogoman if there was bipartisan support for the bill.
“Not at this time,” Wogoman said. “We had hoped to bring on Republican co-sponsors. We got close … but they didn’t want to at this time. We still have the goal of getting bipartisan support.”
Patterson followed up by asking Wogoman to describe the opposition to the bill. He said the opposition comes from some in the gaming industry who wish to avoid any kind of federal involvement in the industry, and from those who believe the excise tax on sports betting should be eliminated altogether.
The American Gaming Association (AGA) confirmed its opposition to the GRIT Act on Thursday, on grounds that Congress instead should move bipartisan legislation to repeal the federal excise tax.
Representative Dina Titus, a Democrat from Nevada, and Republican Guy Reschenthaler of Pennsylvania reintroduced HR 1661 last March to repeal the excise tax, but the measure remains pending in the House Ways and Means Committee and has yet to receive a hearing.
“Congress enacted the federal sports-betting excise tax in the 1950s as a tool to prosecute illegal gambling operations,” said Chris Cylke, senior vice president government relations with the AGA.
“Today, this antiquated policy puts the nascent legal market at a competitive disadvantage against offshore illegal operators, who do not pay any taxes and prey on vulnerable customers.”
Cylke said the AGA would work with the bill’s sponsors and other stakeholders “to combat illegal gambling and address problem gambling in ways that do not further enshrine bad tax policy and give criminals a leg up.”
Brianne Doura-Schawohl, CEO of Doura-Schawohl Consulting in Washington, D.C., said the bill was long overdue.
“Even in spite of the tenuous political climate, I believe that as the market has expanded and concerns have arisen surrounding gambling related harm, I remain optimistic that this piece of legislation receives at minimum the discussion that it deserves,” Doura-Schawohl said.
“It's imperative that problem gambling/gambling addiction receive parity to that of other addictions at the federal level. This should be inclusive of research and federally funded prevention and treatment programs,” she added.
