A low-rate ad valorem tax base would make sense if the states were looking to design an excise tax An excise tax is a tax imposed on a specific good or activity. Most states levy ad valorem (value-based) taxes on gross gaming revenue.

Most recently, online sports betting went live in New York with a whopping 51 percent tax rate on gross gaming revenue. A broad tax base reduces tax administration costs and allows more revenue to be raised at lower rates.ĭesign. A narrow tax base is non-neutral and inefficient. States that have yet to legalize, but which may do so, should pay attention to the impact of tax A tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities.ĭesign in states that already have legal and taxed sports betting-specifically tax base The tax base is the total amount of income, property, assets, consumption, transactions, or other economic activity subject to taxation by a tax authority. Since 2018, 30 states and the District and Columbia have legalized and imposed taxes on sports betting.