Is National Problem Gambling Legislation on the Horizon?

With the spread of sports betting and online casino gaming throughout the country over the past decade, problem gambling is also on the rise. The issue prompted a pair of US legislators to introduce a new bill to Congress to establish federal funding for research, prevention and treatment of gambling addiction.

Senator Richard Blumenthal and US Representative Andrea Salinas introduced the Gambling Addiction and Recovery, Investment and Treatment Act (GRIT) on Thursday, which would be funded by sports betting tax revenue. The effect of the new law would give much-needed support to state health agencies and nonprofit organizations and invest in best practices and extensive national research.

What is GRIT?

The GRIT Act would dedicate 50% of federal sports betting excise tax revenue to gambling addiction treatment and research, with no tax increases on US citizens. It will distribute 75% of those funds to individual states through the Substance Abuse Prevention and Treatment Block Grant program and 25% to the National Institute of Drug Abuse for gambling addiction research. 

Spending for the program would be authorized for ten years, with the Secretary of Health and Human Services required to submit a report to Congress regarding the law’s effectiveness within three years of passage. No new government agencies will be created, as it will use existing HHS procedures. 

The proposal has gained support from several responsible gaming organizations, including the National Council on Problem Gambling (NCPG), the Oregon Council on Problem Gambling, and the Connecticut Council on Problem Gambling.

Problem Gambling Numbers Climb

Research data show that almost seven million US residents have a gambling addiction, and the NCPG reports that the number has risen 30% from 2018 to 2021. More than $7 billion dollars is estimated to be spent on problem gambling annually, including costs for healthcare, criminal justice, bankruptcies and job loss.

“We believe that the expansion of online gambling, including sports betting, has increased the severity and rate of gambling problems,” said NCRG executive director Kevin Whyte in a 2022 Newsweek interview. 

Research shows that young adults are most vulnerable to addiction, with 6% to 9% encountering gambling-related problems. More than 12 states have legalized sports betting apps in the past few years as the industry continues to set revenue records.

Impact of GRIT on US Sports Betting Market

GRIT would direct funds from the current excise tax to research and treatment of gambling addiction. Some lawmakers have criticized the 0.25% excise tax on federal sports betting handle. Representative Dina Titus of Nevada has sought to repeal the bill, as many lawmakers are concerned that the taxes collected would not be allocated for a distinct cause, so no specific program would lose revenue.

US sportsbooks have contributed over $500 billion in federal excise taxes since PAPSA was overturned in 2018, with $235 million paid in 2022. However, that could change in the future as lawmakers have already made multiple attempts to repeal the tax.

The American Gaming Association (AGA) has publicly opposed GRIT, campaigning for reduced government involvement despite the proposal’s good intentions. The agency has invariably supported removing the federal sports betting excise tax, which AGA Senior VP of Government Relations Chris Cylke pointed out was introduced in 1920 to fight against illicit gaming operations and currently puts the market at a disadvantage against them.