As approved by voters in 2019, a tax of 10% is imposed on net sports betting proceeds. For the purpose of calculating its net sports betting proceeds, a sports betting operator or internet sports betting operator (sports betting operator) has been allowed to deduct all payments to players, all federal excise taxes paid, and a certain percentage of free bets placed by players as follows:
Between July 1, 2025, and June 30, 2026, no more than 2% of total free bets placed each month; and
On and after July 1, 2026, no more than 1.75% of total free bets placed each month.
The act alters the percentage of free bets that a sports betting operator is allowed to deduct so that:
Between July 1, 2025, and December 31, 2025, no more than 2% of total free bets placed each month may be deducted; and
Between January 1, 2026, and June 30, 2026, no more than 1% of total free bets placed each month may be deducted.
Beginning on July 1, 2026, the act removes the deduction for all free bets placed.
For the 2025-2026 state fiscal year, $17,135 is appropriated from the sports betting fund to the department of revenue for personal services and tax administration IT system support.
(Note: This summary applies to this bill as enacted.)