Former Chicago Mayor Rahm Emanuel, a possible 2028 Democratic presidential candidate, is proposing a new tax on online gambling and prediction markets to fund research in fields where the US is competing with China.
The former Illinois congressman, ambassador to Japan and White House chief of staff has been contemplating a run for the Democratic presidential nomination and rolling out policy proposals to bolster his chances in what is expected to be a large field of candidates.
His latest proposal, which was reviewed by Bloomberg, would put a 10% federal transaction tax on wagers in licensed online sportsbooks, digital casino platforms, prediction market apps and exchanges.
Emanuel estimates the levy would generate $30 billion to $50 billion in revenue, which would fund research on artificial intelligence, quantum computing, fusion energy, life sciences and national security-related technology.
His proposal would require legislation to go into effect.
Emanuel said he has not yet decided about a potential White House run. "I'm thinking about it," he said in an interview.
Asked whether the policy rollout was intended to get ahead of Democratic competitors, he demurred. "While that may be a side benefit, I'm more interested in the American people getting ahead and America staying ahead."
The tax proposal follows an earlier call by Emanuel to ban federal employees at all levels from participating in prediction markets.
If elected, Emanuel said he would restore research money that Republican President Donald Trump has cut. The proposed new innovation fund would be used to supplement existing funding for research and development programs.
"It doesn't replace what you spend today. It builds," he said. "It's new money, not replacing old money."
There could be widespread opposition to his proposal within what he estimated to be the $400 billion online betting and prediction market industry, as well as from Americans who use the platforms.
Emanuel said the investments would help the US compete with China, which he said has taken advantage of Trump's cuts in research and his onslaught against American universities.
"I'm talking about a specific innovation fund that keeps America beating China rather than going to second place against China. And that's how you sell this,"
he said.
He likened his proposal to other "vice" taxes on products such as alcohol and tobacco and said he assumed other Democrats would support the accompanying increase in research dollars. "I'm laying out a specific plan. They'll have their obligation to do theirs."