Rahm Emmanual Proposes 10% Federal Tax on Online Gambling
On April 16, Rahm Emmanual, a potential Democratic candidate for the 2028 presidency, proposed a 10% federal tax on all U.S. online gambling, including prediction markets.
The plan for 10% federal tax on online gambling
Emmanuel’s plan to impose a 10% tax on online gambling is estimated to raise $30 to $50 billion annually. The funds would be used to strengthen the United States' competitiveness globally by establishing an American Innovation Fund. The fund would support research in areas such as AI and advanced technology for U.S. national security.
Emmanuel is the former mayor of Chicago, and his post as the U.S. Ambassador to Japan ended in 2025. For his proposal to become a law, his act would have to be passed by Congress. With the current political environment, that could be a tall task.
The recent proposal was not solely focused on online gambling; Rahm also included real estate issues and changes to the retirement age.
Emmanuel is not the first
Emmanuel’s proposal is not the first of its kind, as previous efforts to change online gambling laws at a federal level have failed. In 2023, Representative Paul Tonko authored the Betting on Our Future Act, which would ban sportsbook advertisements modeled after the advertisement ban on tobacco. However, it got little attention in Congress and had no co-sponsors. Critics pointed out that, under the First Amendment, ads for sports wagering were protected by the Constitution.
In 2024, Tonko and Senator Richard Blumenthal co-sponsored the SAFE Bet Act, which would not be an outright ban of sports advertising but would restrict it for live sporting events and those on primetime TV. There are other issues in the Act, such as AI targeting and a federal regulation for sports betting, but nothing has come of it, with again, little attention on Capitol Hill.
Opposition on the way
If Emmanuel’s initiative gains traction in Congress, there will be opposition. First and foremost, it will face strong opposition from groups that already benefit from state taxes on online gambling, mainly state legislators and tribal entities. Emmanuel did not have any language in his proposal on how the federal tax structure would impact the state and tribal tax structure.
Online betting sites and prediction market platforms would likely also oppose the federal tax, as would professional sports leagues.
Prediction market issues
Emmanuel's recent proposal was not the first to address prediction markets. In March, he proposed a ban on prediction markets for federal employees and their families across the judicial, legislative, and executive branches.
His argument was that federal employees could use information not available to the public to profit from event contracts on U.S. elections and military action. A U.S. soldier allegedly used insider information to profit from the capture of Venezuelan President Nicolas Maduro.
As a whole, prediction markets have been a hot topic in several states, where there is a belief that they are a form of gambling and not financial tools. This is despite the fact that the prediction market platforms are federally regulated. Recently, one of the biggest prediction market platforms, Kalshi, was banned in Nevada, and Minnesota recently initiated a proposal to ban them outright in the state.
The president and CEO of the American Gaming Association, Bill Miller, has also recently voiced his own criticism of the CFTC and prediction market platforms.
