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Pennsylvania casinos challenge gaming tax treatment of unlicensed machines

Regulation

A group of Pennsylvania casino operators filed a petition with the state Supreme Court on 29 July, asking it to reassess tax rules for slot, skill and hybrid games. The petition argues that taxing licensed slot revenue at about 50% while unlicensed operators pay no tax violates the state constitution; it cites about $1.2bn in licensed-operator taxes in 2023 and estimates 67,000 unlicensed skill and hybrid machines in the state.

The petition could affect how Pennsylvania taxes licensed casinos relative to operators of unlicensed gaming machines.

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Tax Law Center urges wagering tax treatment for US sports prediction contracts

It was reported that the Tax Law Center published an analysis on 1 October arguing that US sports prediction contracts qualify as wagers for federal taxation. Its interpretation would bring these contracts within gambling provisions covering excise taxes, winnings and loss deductions. The analysis calls for IRS clarification to reduce uncertainty.

An analysis from the Tax Law Center, dated Oct. 1, examines whether contracts tied to sporting events on venues like Kalshi belong within the federal rules that govern gambling. The center's position is that such contracts amount to wagers for federal tax purposes.

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