To say the launch of legal sports betting in New York has been a success would be a major understatement: The state has taken in over $1 billion each month since launching in January of this year. In the first month of operation, the Empire State set the monthly record for handle in the U.S., which was only 23 days, as sports betting did not launch until January 8th.
Even with sports betting being a huge success for the Empire State, the sportsbook operators in the state are not happy campers: The state’s tax coffers have been filled significantly, but that is because there is a sports betting tax rate of 51%, which is tied with New Hampshire for the highest in the nation. While the sportsbooks had massive gross revenue of $541.2 million from launch until June 5th, they had to give a little more than half of it to the state.
Bill Pascrell III of the Princeton Public Affairs Group is a gaming lobbyist based in New Jersey. He recently stated:
“I think the sooner New York gets its act together with that, the better, because the existing sports betting operators in New York are dying on a vine. It’s just not sustainable at that tax rate.”
“And without being able to complement it with some iCasino and poker.”
William J. Pascrell III
Poker and iGaming
To get the talks going about legal online poker and casino gaming, the chairman of the Senate Racing, Gaming and Wagering Committee, Senator Joe Addabbo introduced legislation later in the last legislative session. Addabbo wants legal poker and iGaming to be a focal point of gaming in the 2023 state budget.
The iGaming bill that Addabbo introduced in the last session had a tax rate of 25% as well as a deductible for promotional play. Estimates have been made that New York could take in nearly $500 million a year from iGaming taxes. Also, the state could get around $150 more million in casino licensing fees.
Addabbo is confident that iGaming will be legalized in New York stating:
“In my opinion, iGaming in New York is not a question of if, but when. It’s going to happen — just maybe not this year.”
Joseph P. Addabbo Jr
More Competition?
Hard to believe that the current sportsbook operators want more competition from other sportsbook operators. However, that is the case, and it is pretty simple, as the more operators there are in New York, the lower the sports betting tax will be. Still, the state did not pass a bill in the last session which would do just that.
New York Assemblyman Gary Pretlow introduced a bill where the state would have no less than 14 online sportsbooks by the end of 2023. This would lower the sports betting tax from 51% to 35%. The bill also called for at least 16 online sportsbooks by the end of 2024, which would decrease the tax rate further from 35% to 25%. While the bill did not pass, Addabbo said that in the future, he is open to discussions on lowering the tax rate on sports betting.
The New York online sportsbook operators hope that Addabbo does discuss a lower tax rate and that it eventually comes to fruition. While they have not made public their losses in the New York market, several have made public the overall losses in the quarterly earnings.
