Sports betting tax too low?
Last year, West Virginia legislators made a multi-million-dollar wager. They bet gambling interests would not be inclined to offer sports betting in states with high tax rates on the business.
Lawmakers were told last week that it is too early to say with certainty how much state government will make from sports betting at the five casinos where such wagering is offered.
State Lottery Director John Myers said estimates of between $2 million and $5 million a year are the best he can do.
That prompted State Sen. Mike Maroney, R-Marshall, to speculate that West Virginia’s tax on sports betting is too low.
“I still think we gave this away,” he commented, adding, “I think the numbers are going to show we left a lot of money on the table that went into the pockets” of casino operators.
Maroney is not the only person asking that question. In a report on state tax rates on sports betting, the legalsportsreport.com website questions, “why should a state be content with the 10 percent tax West Virginia imposed?”
When legislation allowing sports betting was being debated last year, proponents argued a 10 percent tax and $100,000, five-year licensing fee was needed to compete with other states.
Yet even as West Virginia casinos were scrambling to get sports betting up and running, so were competitors in Pennsylvania — which has a 36 percent tax rate and $10 million licensing fee.
And by the way, business is good at the Keystone State sports betting operations, which handled $16 million in wagers during December alone.
Other states, including Delaware and Rhode Island, are betting on taxes in the 50 percent range. Gambling interests are primed to offer sports books in those states.
So perhaps Maroney is right.
The question now is what, if anything, his fellow legislators plan to do about that.