A bill proposed before the New York State Assembly would seek to reduce the high tax rate on online sports betting in the Empire State.
While the advent of online sports betting last year was a revenue boon for the state of New York, online sportsbooks aren’t feeling the embrace of the love so much. The online sports betting tax rate of 51% in the Empire State is among the highest in the USA in states where sports betting is legalized.
That high rate of taxation is impacting significantly how the leading sportsbooks are both viewing New York State, as well how they are operating within the state. Currently there are only nine online sportsbooks operating in New York state. Compare that to Ohio, which saw 16 sites launching on January 1, 2023 when legal and regulated sports betting was launching in the Buckeye State.
Prominent sportsbooks such as DraftKings, FanDuel, BetMGM and Caesars have raised concerns that the taxation rate in New York isn’t making it worthwhile for them to operate there. BetMGM openly stated that it would be de-emphasizing promotion of his New York site, citing the tax rate as being irrational.
Under the terms of New York Senate bill S1962, the tax rate would be reduced while also adding more online sports betting sites into the New York market. The bill is being sponsored by Sen. Joseph Addabbo (D-Queens) who has been the chief proponent of online betting among the Empire State’s politicians.
Under the terms of the bill, the number of online sportsbooks operating in the state would increase to 14 by Jan. 31, 2024 and 16 by Jan. 31, 2025. At the same time, the tax rate would drop to 50% once 10-12 sportsbooks, to 35% when 13-14 books are operating and to 25% when 16 books are open in New York.
Previous Bill and Potential NY Sportsbooks
A similar bill introduced last year failed to pass. New York garnered $693.1 million in tax revenue for the state coffers from sports betting last year. By contrast, operators generated $665.9 million in revenue.
The online sports that could be waiting for a more favorable tax landscape before moving into New York include Bet365, Borgata, Unibet, Betfred, Barstool, FOX Bet, and SI Sportsbook (formerly 888sport). We also expect online casinos to go live in New York as the state is losing a lot on the potential revenues from the igaming.
