Congress quietly cuts federal tax on sports betting, handing industry a windfall.
S. 2773 — WAGER Act · Filed by Catherine Cortez Masto (D-NV) · 1 cosponsor · Introduced Sep 11, 2025 · Referred to committee
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What it does
This bill exempts sports betting from the federal excise tax on authorized wagers. Currently, the Internal Revenue Code imposes a tax on certain wagers; this bill carves out sports bets that are legal under state law or tribal gaming compacts, allowing those bets to escape the federal tax. The benefit flows to sportsbooks and bettors in states where sports betting is legal.
Why we flagged it
The bill's sole operative mechanism is a federal tax exemption for a specific industry activity. It is a narrow tax relief provision benefiting the sports betting sector, not a broad public-interest measure.
What the text implies
- The exemption applies only to bets placed in states where sports betting is legal, creating a geographic subsidy favoring states with legalized sports betting over those that have not.
- Sportsbooks operating in legal states gain a competitive tax advantage over other forms of wagering (horse racing, casino games) that remain subject to the excise tax, potentially shifting consumer spending toward sports betting.
- The bill does not require sportsbooks to pass tax savings to bettors; the exemption may be retained as profit margin, making it a pure industry subsidy rather than a consumer benefit.
Section numbers refer to the bill text the analysis read — linked under Primary records below.
Who it affects
The bill reduces federal tax revenue without offsetting public benefit or cost savings passed to ordinary citizens. Sportsbooks and the gambling industry capture the tax savings; there is no mechanism ensuring bettors receive lower odds or reduced fees. The foregone revenue must be made up through other taxes or reduced public spending.
Who stands to gain
- sportsbooks and sports betting operators
- online gambling platforms offering sports betting
- sports betting technology providers
Named in the bill
Internal Revenue Code of 1986, Section 4402, Indian Gaming Regulatory Act, state gaming regulators, tribal gaming authorities
Where it stands
1 cosponsor: 1 Republicans.
- Sep 11, 2025 — Introduced · Congress.gov: “Introduced in Senate”
- Sep 11, 2025 — Referred to Senate Committee on Finance · Congress.gov: “Read twice and referred to the Committee on Finance”
Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.
Money around this bill
4 lobbying clients named this bill on 5 disclosure filings across 2 quarters, Dec 2025 to Jun 2026. Those filings disclosed $530,000 in lobbying spend. A filing names 6 bills on average, so that figure is what each filing reported, not a share belonging to this bill.
More lobbying clients named this bill than 72% of bills with at least one filing.
Catherine Cortez Masto, the sponsor, reported $298,634 in PAC receipts in the 2026 cycle.
- Draftkings Inc. and Its Affiliates — $260,000 on 1 filing
- Draftkings Inc. — $180,000 on 2 filings
- Red Rock Resorts, Inc. — $60,000 on 1 filing
- American Gaming Association — $30,000 on 1 filing
Lobbying Disclosure Act filings through Jul 16, 2026. A filing shows who paid to lobby on a bill it names, not what changed.
How this was measured
Analysis — Quorum's AI read the bill text published by Congress.gov (751 characters) on Aug 21, 2026. Section numbers in the findings refer to that text, linked below; transparency and hidden-provision scores are compared against the median of 16,222 analysed bills.
Status and sponsors — Congress.gov's bill record — actions, committee referrals and cosponsors — loaded nightly. The timeline shows status changes, not every procedural action.
Money — Senate Lobbying Disclosure Act filings whose specific-issue field names this bill for quarters ending Dec 2025 to Jun 2026. A filing's amount is reported whole beside the median number of bills a filing names; it is never divided across them. PAC receipts are FEC-reported contributions to the sponsor's candidate committee in the 2026 cycle.
As of — lobbying records through Jul 16, 2026 · page rendered 2026-10-20.
“Congress quietly cuts federal tax on sports betting, handing industry a windfall.” QuorumCivic. https://share.quorumcivic.app/bill/119/s2773 Report an error
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