Senate Bill HB1311: Taxing Free‑Bet Credits from iGaming
Most people don’t pay attention to bills unless they directly affect what they use or do, but this one might hit close to home for anyone watching the iGaming space. Senate Bill HB1311 doesn’t stop betting, limit who can gamble, or even mess with tax rates for players. It just focuses on something that’s been quietly helping platforms market themselves for years, free-bet credits.
What Casino Apps Have Been Doing and Why Lawmakers Care Now
If you’ve ever used a casino app, chances are you’ve seen the free-bet offers. Sometimes you get them just for signing up, other times you earn them by playing. They’re easy to use and they keep people coming back. These offers are part of the reason some people even bother trying a new app at all. You’re not always betting with your own money in the beginning, and that makes a difference.
This space continues to grow, and as it does, states are starting to examine what is not being taxed. Free-bet credits might be free for players, but on paper, they’ve also helped platforms lower their tax bills. With that being said, Texas online casinos still highlight generous welcome deals and fast payouts. Unlike Colorado’s regulated market, where HB1311 would now count promo credits as taxable revenue, offshore and state-grey operators don’t face the same restrictions. Until now, much of that promo money in Colorado could be written off, but HB1311 changes that by requiring those credits to be included in taxable earnings.
Promotions Won’t Stop, But They’ll Probably Change
These kinds of bills can sound like they’re trying to end promos altogether, but that’s not really how things work. Promos are part of how platforms survive. Without them, there’d be no reason for a new user to pick one app over another. So, the idea that this bill is going to end free bets is just not realistic. What’s more likely is that companies will pull back on how many they hand out or change how they structure them.
Instead of giving out big bonuses upfront, you might start seeing smaller amounts released over time or based on activity. The total value might not drop, but how it’s given could look different. That’s just business adapting to a rule change, not disappearing. Platforms want users, and they know users respond to rewards, especially ones that don’t come out of their own pocket.
The Numbers Were Getting Too Big To Ignore
Part of the reason this bill even came up is that the numbers started to look off. Some companies were reporting high levels of user activity, but the tax revenue wasn’t rising in the same way. Once lawmakers realized a big chunk of what should’ve been counted as earnings was being written off as promo spend, they started asking questions.
This isn’t really new since other industries have gone through the same thing. When streaming platforms gave away free months or phone companies offered free phones with contracts, there were limits on how those deals could be used in tax filings. iGaming just hadn’t reached that point yet, until now.
HB1311 closes that gap since it doesn’t raise taxes, and it doesn’t go after people using casino apps. It just says that if you’re a business handing out value, even in the form of virtual credits, that should count when you report your numbers.
It Levels the Playing Field Too
Some platforms already operate in states that don’t let them deduct promotional spend. Others do. That means two companies doing the same thing could end up with completely different tax bills just based on where they’re based. That’s not good for competition, and it’s not great for users either. When businesses aren’t playing by the same rules, it usually leads to fewer choices and worse deals for the people actually using the service.
This bill won’t fix everything, but it moves things closer to a setup where everyone’s working under the same system. Once companies know what the rules are, they stop guessing and start adjusting. In the long run, that makes the entire space healthier.
Free Value Still Exists, It Just Has to be Accounted For
The big thing getting lost in this discussion is that value doesn’t disappear just because it gets taxed. If a platform gives you a $100 free bet, it’s still worth something, even if you don’t win. That $100 incentive is the reason you logged in. Before, the company could just hand it out and not count it toward what they earned. HB1311 flips that. It says, “If you’re giving it out and using it to gain users, it counts.”
It’s not a punishment, and some might argue that it was expected. iGaming is no longer a side gig, it’s a huge industry with real profits, and this bill reflects that shift. It’s also a sign that state governments are starting to understand the scale of what they’re dealing with. The space got big fast, and now it’s time to update the way it’s tracked and taxed.
HB1311 doesn’t change how people play. It just changes how platforms report what they’re doing behind the scenes. Free credits will still exist, companies just have to count them now. That’s all this really is.
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