Skip to main content

Arkansas’ House Committee Does Not Back Proposed Measure for Income Tax Deduction for Gambling Losses

Last night, Arkansas’ House Taxation & Revenue Committee turned down a measure filed by State Representative Julie Mayberry on the income tax deduction.

Not even one of the 20 Committee members backed HB1653, under which the existing income tax deduction for gambling losses in the state of Arkansas would be eliminated. The proposed piece of legislation sought to see both gambling winnings and losses taxed, and the additional tax revenue would have been redirected to fund the Medicaid waiver waiting list in the state.

The sponsor of the bill shared her disappointment with the outcome, saying that the Committee has obviously preferred to subsidize gambling habits. Ms. Mayberry, however, does not find that entertainment such as gambling should be a priority to the state.

The Department of Finance and Administration has previously reported that gambling losses amounting to over $240 million were claimed on income tax returns in 2017 in Arkansas. According to the Department’s estimates, the state would collect new tax revenue of approximately $11.5 million in case that gambling losses were taxed.

The proposed piece of legislation, however, faced the opposition of Oaklawn Park’s legal counsel, who urged local legislators not to back HB1653. According to Walter Ebel, if Arkansas residents are forced to pay taxes on their gambling losses, they would choose to go to neighbor states and play there, to avoid such taxation.

HB1653 Sponsor to Seek More Discussions on the Bill

According to the tax attorney Ebel, local people could be discouraged from gambling in case that the proposed bill is turned into law. Mr. Ebel further shared that it would create paperwork burden for gambling and racetrack operators and would make local taxpayers turn to nearby states in order to place their bets. He also reminded that for the time being, none of Arkansas’ neighboring states have slashed the income tax deduction for gambling losses, which could discourage people from participating in gambling activities in the state.

State Representative Julie Mayberry, however, has no intentions to quit. She said that she may seek an interim study on the proposed piece of legislation in order to continue discussions on the bill. Ms. Mayberry explained that she may try to introduce the bill once again in the following legislative session should the discussions have a positive outcome.

Previously, she has revealed that an overall amount of $11 million will be provided to the Community and Employment Supports Waiver Program of Medicaid every year, while another $500,000 will be granted to state general revenue on an annual basis.

When asked whether she considers the proposed bill a tax increase, Ms. Mayberry said she did not. The HB1653 sponsor further explained that she does not consider the proposed bill an investment. She, however, reminded that there were more than 3,100 people on the developmental disabilities waiver list as of the end of February 2019, and the new tax revenue that could be generated thanks to the bill could be used to help them.

 Author: Harrison Young

Harrison Young is an experienced writer, who started his career almost 8 years ago. Prior to joining our team at CasinoGamesPro, he worked as an editor for a small magazine.