As states across the country  consider sports betting-related legislation, several proposed bills include a fee payable to professional sports leagues, a so-called “integrity fee,” calculated as 1.0% of the total amount bet (handle). The initial rationale presented for such a fee was that leagues would require additional funds to bolster efforts related to monitoring the integrity of sports contests, although ensuing justifications for the fee have also included compensation for the leagues’ intellectual property.

To contribute to a broader foundation for discussing legalized sports betting, the American Gaming Commission commissioned Oxford Economics to analyze the implications of this League Fee tax structure. Our analysis consists of an independent assessment of the potential for various tax structures, including the League Fee option, to support legalized sports betting and satisfy the goals shared by both the sports leagues and gaming industry.