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In an effort to freeze what is the highest sports betting tax rate in the US, New York Assembly Racing and Wagering Committee Chairman J. Gary Pretlow introduced a bill (A8658) on Jan. 10 to ban sports betting licensees from requesting a change to the 51% tax rate on gross online sports gaming returns.
In other words, once a contract is awarded to an operator by the state of New York, this law would prohibit that company from asking for a lower rate to match the other states who offer legal sports betting and charge what might be considered more reasonable tax rates.
After less than a week since the New York online sports betting market launched, the projected billion-dollar industry is already off to a lucrative start, a market that in its first 12 hours became the “Top State for Sports Betting in the US!” as we previously reported.
But that high 51% tax rate has Chairman Pretlow concerned that operators will attempt to renegotiate.
The 51% sports betting tax rate has always concerned Chairman Pretlow, who has told the press that charging such a high rate could scare away potential platform operators or at the very least prevent them from being able to offer customer building promotions that other states with lower rates can more readily afford.
With any new market, startup costs can get overwhelming, and some industry leaders have expressed concerns that the 51% tax rate could create a narrow profit margin, but despite that pushback nine eager online sportsbooks were conditionally approved by the NY Gaming Commission.
Four of them – BetRivers, Caesars Sportsbook, DraftKings, and FanDuel – are now up and running while the other five – BallyBet, BetMGM, PointsBet, Resorts World, and WynnBet – are still getting their legal and regulatory ducks in a row but that’s not expected to take much longer.
Meanwhile, Chairman Pretlow’s A8658 bill must sit and patiently await a committee hearing.
Now that Chairman Pretlow has introduced his tax rate freeze bill to the state legislature, it must endure what all new pieces of legislation go through, which is a series of debates, rewrites, and compromises, in this case that should happen within a hearing by the NY State Assembly Racing and Wagering Committee.
These bill adjustments will take place in the current New York legislative session which started on January 5 and will meet until the second of June, a tricky process for any new bill, one that keeps most from ever seeing the governor’s desk.
Should that happen with A8658, the new law would apply to the nine approved sportsbooks that currently operate from eight licensed mobile platforms, and that, according to New York’s sports betting law, is as many as the state will be accepting. At least for now.
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Mike Lukas is a retired standup comedian turned freelance writer now living in Dallas, Texas, originally from Cleveland, Ohio. His love for the game of football and all things Cleveland Browns turned Mike into a pro blogger years ago. Now Mike enjoys writing about all thirty-two NFL teams, hoping to help football gamblers gain a slight edge in their pursuit of the perfect wager. Email: mik[email protected]More info on Mike Lukas
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