AGA opposes GRIT Act, sees it as anachronism

The American Gaming Association has surprisingly become the first and most prominent opponent of the newly-tabled GRIT Act, or otherwise, the Gambling Addiction Recovery, Investment, and Treatment Act which is designed to serve as the means of a federally-backed initiative that seeks to help tackle problem gambling in the United States at the time of a rapid legalization of sports betting, online poker, and iGaming in the country.

AGA has objected to the proposal, with the organization’s SVP, Government Relations Chris Cylke speaking to SBC Americas, and outlining the body’s motivation behind its decision. He objected to how the money for the initiative would be collected.

He equated the GRIT Act with the federal sports betting excise tax passed in the 1950s, which was only used to punish the gambling industry controlled by the country’s seedy underbelly at the time, and significantly hampered the nascent regulated sector.

AGA’s biggest concern is to ensure that customers are not pushed into the offshore and illegal gambling market, as the trade group has led years-long campaign to educate bettors and players about how to recognize a licensed website. However, AGA is not opposed to a federal initiative that helps address problem gambling – far from it.

Cylke told the publication that AGA would be working closely with Sen. Richard Blumenthal and Rep. Andrea Salinas, the backers of the GRIT Act, and look for ways to strengthen a problem gambling bill that also ensures that the offshore and illegal gambling sectors aren’t empowered, which is what Cylke and AGA estimate could happen under the new proposal if left unchanged.

Right now, an excise tax still applies to sportsbooks, and in 2023, operators paid $250m because of this tax. The tax takes into consideration the handle – the money bet, and not the revenue, proving difficult at times to meet, even at its current 0.25% rate. However, AGA believes this makes sportsbooks in the United States less competitive and have a harder time competing against illegal counterparts. Cylke similarly noted that thanks to the legalization fo the gambling industry, an unprecedented amount was already being invested in the treatment, research, and prevention of problem gambling.

Meanwhile, others, including the National Council on Problem Gambling, have welcomed the opportunity to see a federal-backed initiative addressing problem gambling take shape, expressing high hopes for its intended and expected impact on the overall gambling ecosystem and consumer well-being in the United States.

The GRIT Act could lead to $125m earmarked for the treatment and prevention of gambling harm and further research to better understand what triggers the condition.

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