New York Budget Continues To Project Higher Online Gambling Revenue

  • Online sports betting operators are unhappy and have requested to lower the state revenue tax of sports betting from 51%.
  • New York governor has increased the projection of total tax revenue brought in from online sports betting to $615 million.

NEW YORK - Since its January launch, New York has been dominant for online sports betting.

So dominant in fact, that they have changed their 2023 projection of tax revenue to $615 million. New NY governor Kathy Hochul believes that the budget projection is maintainable, due to the success of online sports betting in New York.

Online Sports Betting Operators Seek Tax Rate Change

However, the main sports betting operators (FanDuel, BetMGM, and Caesars) have issues with the high tax rate at 51%. There is concern for online sports betting sustainability in the long term by these operators, bringing in less money than they are giving to the state.

These sportsbook operators have requested the State Assembly lower the state tax and stop taxing promotional bets.

New York Sports Betting Dispersion

  • Total Wagered Since Jan. - $7.6 Billion
  • Total Made By Operators – $534.7 Million
  • Total Given To State – $272 Million
  • Total Kept By Operators – $262 Million

Even though there has not been an official response to these requests, a change in the current New York law would allow the operators to be more competitive in New York, and keep dominating over New Jersey.

At a 51% tax rate, New York sports betting operator tax is over double the average tax rate in other states (19%).

Promotional play did help New York launch the market with massive success, but unlike other states, it is being taxed even if the bonus money does not leave the accounts of the operators. This is due to the fact that bettors lost the promotional bonus in the sportsbook.

A Promising Start For New York Online Sports Betting?

In April and May of online sports betting in New York, $109 million was generated in tax revenue. When these numbers were recorded, it is important to remember that the market had recently launched and it was filled with promotions.

Also, New Jersey is still just a short drive away, and has a 13% tax rate for mobile/online betting.

Although the tax rate does not directly affect the experience of the average New York bettor, indirect consequences could potentially be seen in the future. This could take the form of the sportsbook operators offering more expensive betting lines, and cutting down on sign up or reload bonuses to evidently not hit the projected tax revenue budget.

This same concept was seen in Rhode Island, where they failed to meet their projected budget in April of 2018.