D.C. Memo: FCC Sportsbook? Plan Would Fund USF by Taxing Online Gambling

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FCC Sportsbook: Finding new ways to fund the $8.1 billion Universal Service Fund has been a chore. But telecom analysts Blair Levin and John Horrigan think they have an idea that might work: Tax online gambling, including casinos and sports betting. "If government is going to sanction something with proven harms, why not tax it to fund something with proven benefits?" the two said in a recent essay, noting that sports betting is legal in 38 states and Washington, D.C. Levin and Horrigan said their tax would serve two societal interests by helping reduce teen addiction to sports betting and establishing a new revenue stream of the financially troubled USF. "Such a tax would not have the problem of raising the cost of broadband, something we don’t want to cause," the two said. The two concluded that funding the USF through an annual congressional appropriation was not reliable politically and assessing Big Tech revenue — an approach supported by FCC Commissioner Brendan Carr —would be complex and unlikely to be enacted by Congress. A sports gambling tax "provides a steady and, unfortunately, growing revenue stream that can be relied upon," Levin and Horrigan said. Levin and Horrigan cited reports that online sports revenue was $11 billion in 2023 in addition to the $8.5 billion in revenue from online casinos and online lotteries. It was unclear from their article whether online gambling revenue alone would be sufficient to fund the USF.