Rahm Emanuel, a potential 2028 Democratic presidential candidate, proposes increasing the federal government’s dependency on online gambling, despite its known harms, which include elevated risks of suicide.
Emanuel announced a plan he would presumably pursue should he take the White House to levy a new 10% federal tax on online gambling platforms and prediction markets to bolster U.S. spending on “AI, quantum computing, fusion energy, life sciences, and national security tech.”
“Let’s fund cures, build new energy resources, lead in defense technologies, and quantum tech,” Emanuel said of his proposed online gambling tax. He didn’t mention problem gambling or help for those experiencing harm.
The federal government allocates nothing to treat or prevent gambling addiction specifically among the American public. Federal research efforts have been similarly bleak, with its last comprehensive study of gambling harm taking place in the late 1990s.
Undermining Guardrails
By tying federal investments in science, energy, and defense to online gambling revenue, Emanuel’s policy could increase dependence on gambling, potentially undermining consumer protection efforts such as the SAFE Bet Act.
The federal government may be incentivized to support the continued expansion of predatory online gambling, despite negative public health and social consequences.
Americans spent a record $27 billion on state-sanctioned online sports betting/casino gambling in 2025. About 1 in 4 Americans have a betting account, and recent surveys show that problematic sports betting has reached record levels. Online gambling is weighing on consumer credit health, the Federal Reserve Bank of New York recently found.
While the prediction market industry may not welcome a new tax, it could benefit the controversial platforms. Taxing prediction markets at 10% would presumably be accompanied by legislation to allow them to continue offering online sports betting. Emanuel appears to be the latest Democrat to warm to prediction markets.
Emanuel, 66, is a former Chicago mayor, Illinois congressman, ambassador to Japan, and White House chief of staff.
Bottom Line
His proposal to essentially double down on online gambling is unlikely to find popular support. Most Americans appear to want consumer protections and opposition to online gambling from their elected leaders, not for the government to grow its troubling partnership with the harmful sector.
Rather than deepen the federal government’s reliance on online gambling, policymakers should use existing taxes to fund services. Any new tax should be used solely for public health.
A recently introduced bill, the POINTS Act, seeks to use a third of an existing federal sports betting tax (0.25%) to fund addiction-related initiatives. Its prospects in Congress are unclear.
Additionally, Congress should pass legislation to prohibit prediction markets from offering sports betting and casino-style gambling. It should also enact uniform federal standards to reform state-sanctioned online gambling.
Meanwhile, the government can pursue long-delayed enforcement against offshore online gambling.
