Keith Whyte is a good guy. As the Executive Director of the National Council on Problem Gambling, you would hope so. He is a straight talker, a moderate and he is collaborative. He is a great supporter of the gambling industry. But to some extent, he is also a frustrated figure. He is not shy of voicing concerns or issues that many in the gambling industry would rather ignore.
Part of Whyte’s job is to raise funds for problem gambling research, education and treatment. It is a fight he has been waging for over 20 years and just when he felt like he had found an answer, the industry has fought back.
In January, Sen. Richard Blumenthal and US Rep. Andrea Salinas introduced the Gambling Addiction Recovery, Investment, and Treatment Act (GRIT), which proposes to take half of the funds generated by the federal excise tax on sports betting and apply it to problem gambling funding and research.
The American Gaming Association (AGA) has been staunch in its opposition to the act. Whyte believes there is support among non-AGA affiliated casino operators, lotteries and tribal governments, but thus far, the only online sports betting operator to support the GRIT Act is Underdog.
“I don’t have a problem with the AGA opposing the GRIT Act, but if they do oppose it, then I think they should sketch out an alternative. The GRIT Act would provide a minimum of $125 million in national funding for problem gambling every year for 10 years. Show me how else we’re gonna get that,” says Whyte. “If you can, we’d be happy to drop GRIT like a hot potato.”
This is not a new tax. The federal sports betting excise tax has been in place since the 1950s. All sports betting operators pay the tax already. And the NCPG is only asking for half of the federal sports betting excise tax revenue to be devoted to problem gambling.
“The industry could push to cut the other half or it could be used to go after illegal offshore sportsbooks or crack down on grey market slot machines etc… Delivering a 50% tax cut to their members and/or achieving a major policy priority plus getting a big PR win by supporting national funding for problem gambling seems a win win win,” says Whyte.
And taxation has other benefits, he points out.
“Taxation makes government a partner. That is what the industry has found to its advantage in state after state. When you start to generate enormous tax revenue, you become vital to the economy. You become an implicit partner.”
Having the government on side can never be a bad thing. Especially with an industry as politically sensitive as gambling, it can help to weather a backlash and avoid any onerous regulatory conditions that might follow.
But this is the AGA’s position:
“Congress enacted the federal sports betting excise tax in the 1950s as a tool to prosecute illegal gambling operations. Today, this antiquated policy puts the nascent legal market at a competitive disadvantage against offshore illegal operators, who do not pay any taxes and prey on vulnerable customers.
“The AGA opposes the GRIT Act and will continue to educate Congress about why enacting bipartisan legislation to repeal the excise tax on legal sports betting operators is necessary to ensure we can effectively migrate Americans into the protections of the regulated market.”
Fundamentally, taxes are bad. And federal taxes are very bad. As far as the AGA is concerned, this could be the beginning of a long slippery road towards federal regulation. This runs to the core of the AGA’s raison d’etre. The organization was formed in 1995 when President Bill Clinton floated the idea of an additional federal gambling tax on casino revenue to help fund healthcare reform. You can see why the idea of GRIT is antithetical to the AGA.
“The sports betting excise tax was not an issue that bothered the AGA until 2020, when sports betting became big business,” says Whyte, who worked for the AGA for three years as director of research.
Since then, the AGA has backed a bipartisan bill put forth by Nevada Rep. Dina Titus and Pennsylvania Rep. Guy Reschenthaler to repeal the federal excise tax on sportsbooks. The pair have introduced this bill every year since 2020.
While the AGA is keen to keep the federal government out of gambling, Whyte argues that since 2018 and the repeal of PASPA, gambling has become a national issue.
“Now, gambling is absolutely a national issue. Because it is now entwined with sports, which is a national – if not international – issue. They are trying to maintain a state-based framework and taxation control in an environment that is now inextricably a national issue.”
He points to sports betting advertising crossing state boundaries and how gambling has quickly integrated itself with professional and amateur sports and the media around it. The likes of Caesars, BetMGM, FanDuel and DraftKings operate on a state-by-state level but achieve economies of scale because of their national and international presence.
“This is the coming conflict,” continues Whyte. “Will gambling continue to be siloed, regulated and thought about only state by state, or vertical by vertical, or tribe by tribe. Or will we start looking at gambling as a national issue? And, of course, problem gambling is a national public health issue.”
He is not saying that there is a need for federal regulation but that there can be a role for bigger, national agencies. Surely, the existence of the AGA, the Responsible Online Gaming Association, and indeed, the NCPG is proof positive of this line of thinking.
“Why are they taking this maximalist position on the sports betting excise tax? That’s the deeper roots, because on the surface it’s not really explicable. It is a bad look for the industry in the court of public opinion. Especially when they do not have an alternative.”
Rep. Titus has said that each state sets aside money for responsible gambling research and treatment but, Whyte points out, there are six states that provide no funding at all – Alabama, Hawaii, Idaho, Montana, Texas, and Utah, plus the District of Columbia, which recently cut all its public money for responsible gambling.
“Even in the states with funding, per capita allocations are quite low,” says Whyte. “The argument that we don’t need GRIT because states are funding it is just wrong – they’re not.”
In 2024 Mississippi began giving $75,000 a year to problem gambling, while in 2023 Kentucky authorized problem gambling funds for the first time.
There has been progress over the past five years and Whyte is keen to acknowledge this. The last thing he wants to do is drive a wedge between himself and the industry. The NCPG relies on industry funding and has industry members on its board of directors.
“We are trying to forge a path in the middle and bring everyone together,” he continues. “The polarization of the industry, with folks on the pro side and others on the anti side is incredibly, incredibly dangerous. And it doesn’t help people with gambling problems.”
Since the repeal of PASPA in 2018, Whyte has watched the rollout of online sports betting across the country with interest and notes the rising levels of concern in public debate, followed by industry defensiveness, with some providing leadership on responsible gambling while others pull back.
“Some of this is familiar. It reminds me of the online poker boom in the 2000s or the growth of riverboat casinos but online sports betting is different in some ways,” he continues. “You cannot underestimate the importance of sports. Americans are huge sports fans. The intersectionality with sports is one thing that makes it different. Second, is the technology that has allowed it to be present everywhere in the US. Thirdly, we didn’t really prepare for it from a problem gambling perspective.”
“We left it for each state to figure out their problem gambling infrastructure and we’re left with a very unprepared country.”
Whyte believes politicians and the general public now have a perception that sports betting is a lot more dangerous than it is. The 24/7 nature of the access to it on your phone and the bombardment of advertising every single time you turn on a television raises alarm bells.
That advertising can be counter-productive and, says Whyte, is what has driven the public backlash against the industry in the UK and elsewhere around the world. However, the NCPG director remains positive.
“I’ve been in the industry since 1995 and I’ve seen enormous progress in the United States, so that’s all good but there’s a lot more to do. And we’ll get there,” he concludes. “It’s a great industry!”
