Business

IRS Has No Clue Where Gaming Tax Money Is Going

After inquiries dragging on for months, the IRS has finally admitted it has no idea how a Nevada gaming tax that is costing sports wagers $9 million a year is being used, RTG Online reports.

The issue was originally brought to the forefront after CG Technology CEO Lee Amaitis tried to find out exactly what was happening with the sportsbook operators’ tax, and where it was being funneled.

“It’s not that I didn’t want to pay to the tax,” Amaitis said. “I just wanted to know where the money went.”

In 2013, CG Technology paid 25 percent of the entire state of Nevada’s handle tax burden. But for now, the industry is exploding, owing mostly to the proliferation of mobile devices which enable easier access to sports wagering.

Amaitis contacted Nevada Democratic Rep. Dina Titus to help get to the bottom of the question, but the IRS spent several months to formulate a response even after Rep. Titus’ legislative director, David Rosenbaum, sent the inquiry.

When the IRS finally did answer, it said that it had no idea about the whereabouts of the funds, leading Rep. Titus to forward a bill to repeal the tax. According to Titus, the federal government shouldn’t miss the tax, since the IRS couldn’t even find the money when asked.

“The IRS didn’t even know it existed,” the congresswoman said. “The money just went into some black hole in the general fund.”

David Rosenbaum’s research discovered that the tax was apparently instituted to discourage illegal sports book operators, as it was put into place before the 1992 Bradley Act, which defined the parameters of legal U.S. sports wagering.

And for Titus, keeping the funds in-state is the most reasonable move, so that it can be reinvested into Nevada’s economy. And incredibly, rivals in the sportsbook industry unilaterally agreed with the effort to keep money in the state. With that extra money in hand, CG Technology would be set to expand operations in the state, creating new jobs in research and development for mobile sports wagering.

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