[4] In the United States, excise taxes are applied to specific goods and services, including legal and illegal gambling transactions.
Excise taxes are often used to regulate activities deemed harmful, such as wagering, alcohol, and tobacco, while also generating revenue for the government.
[5] Today, wagering excise taxes continues to play a dual role in society, raising funds and serving as a tool for regulation while adapting to include various forms of modern betting, such as daily fantasy sports like Prize Picks.
[10] With the growth of modern betting platforms such as daily fantasy sports, the application of excise taxes has expanded to cover these new forms of gambling.
[11] In 2024, the treasury inspector general for tax administration (TIGTA) reported that non-filers were associated with over 13 billion dollars in total gambling winnings.
As the gambling industry grows, the IRS aims to enforce excise tax compliance more rigorously to minimize revenue loss and enhance funding for government initiatives.
[12] Increased expenses might deter some people from gambling as much, but others might react by taking on riskier activities or trying to make up lost money by spending more.
Price increases can also make gambling seem less valuable, which could lower consumer satisfaction and general welfare, especially if people feel pressured to keep playing despite the higher costs.