WAGER Act

The WAGER Act would amend the Internal Revenue Code to exempt sports betting from the federal tax on authorized wagers. Specifically, it adds a provision stating that any wager on a sporting event is exempt from the federal wagering excise tax if the bet is not prohibited by the state in which it is accepted or by an approved Tribal-State gaming compact under the Indian Gaming Regulatory Act. The exemption would apply only to wagers placed after the act’s enactment. In short, when a state or tribal jurisdiction lawfully allows sports betting, those legal bets would not be subject to the federal tax on wagers. This bill does not create new legality for sports betting itself; it simply removes the federal excise tax on wagers that are already legally authorized. It also ties the exemption to state or tribal authorization, reinforcing that illegitimate or non-compliant wagers would not qualify for the tax exemption.