Wyoming Eyes Tax Hikes on Gambling to Boost State Revenue

A Push for Higher Gambling Taxes

Wyoming’s legislature sparked heated discussion, proposing tax hikes on online sports betting, skill games, and historic horse racing during a Select Committee on Capital Financing and Investments meeting in Cheyenne.

The plan, reported by Cowboy State Daily, aims to align Wyoming’s 10% sports betting tax with the national 19% average, doubling it to 20%.

Skill game taxes would rise from 20% to 25%, with funds earmarked for highways, while historic horse racing taxes would increase from 1.5% to 2.5%. “The state has been quite generous to these industries,” said State Senator Tara Nethercott, R-Cheyenne.

Doubling Down on Sports Betting

The proposal to double online sports betting taxes from 10% to 20%, championed by Rep. Liz Storer, D-Jackson, targets a $629.7 million handle since 2021, which yielded just $3.8 million in state taxes.

Wyoming’s current rate lags behind neighbors like Colorado’s 10% and Illinois’ soon-to-be-change progressive 15-40% structure. The first $300,000 in tax revenue funds gambling addiction programs, with the rest bolstering the general fund.

Nathan Click, Sports Betting Alliance spokesperson, warned that higher taxes could mean “worse promotions and decreased payouts,” hurting legal operators’ edge against offshore sites.

Skill Games Face a Steeper Cut

Skill games, found in bars and truck stops, generated $31.13 million in net revenue in 2024, with $6.2 million in taxes split among counties ($1.5 million), cities ($1.2 million), the Gaming Commission ($622,690), and public schools ($2.8 million), per Cowboy State Daily.

The proposed 20% to 25% tax hike, backed by Rep. Bob Nicholas, R-Cheyenne, would funnel extra funds to highways. Jonathan Downing of Cowboy Skill LLC argued the increase would make Wyoming’s rate “one of the highest in the country,” discouraging investment.

Mike Moser, Wyoming State Liquor Association director, added that operators might shift losses to host businesses, squeezing small bars.

Historic Horse Racing Under Pressure

Historic horse racing (HHR), slot-like machines betting on past races, drove a $2.15 billion handle in 2024, dwarfing live and simulcast racing, per Cowboy State Daily.

The proposed tax hike from 1.5% to 2.5%, plus a 0.4% Breeders Fund contribution, would raise the effective rate to 2.9% representing 400 full-time and 100 seasonal workers, called the increase burdensome, noting operators keep just 7.2 cents per dollar wagered after 90 cents in payouts and 1.9 cents in taxes.

HHR contributed $11 million to counties and $10.1 million to cities in 2024, per the Wyoming Gaming Commission. Nethercott countered that Wyoming’s light regulation justifies the adjustment.

A New Monitoring System Looms

Lawmakers also proposed a central monitoring system to track gaming machine activity in bars, truck stops, and casino-style halls, ensuring accurate revenue reporting for taxes,.

The system, operated by a third party, would verify proceeds from skill games and HHR machines, which generated $36.8 million in taxes since 2020, per the Wyoming Gaming Commission.

Nethercott emphasized the need for oversight, citing the industry’s “exponential growth” and lax supervision. However Downing fear added costs could further strain operators. The system’s details, including funding, remain under discussion, with a draft bill expected by August 2025,