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In less than half a year since its launch, New York’s online sports betting market has already reported a $6.9 billion handle that has created $491.3 million worth of gross gaming revenue for the sportsbooks operating there which has resulted in $250 million in tax revenue for the state.
That ranks 2nd behind Pennsylvania which took in $256.4 million in about the same amount of time, though that state did it charging operators a 36% tax rate on revenue, whereas the Empire State charged an industry high 51%, a record rate that the prior administration supported.
Reports vary, but last year sports betting in the US was said to have generated a $57.2 billion handle that created $4.33 billion in revenue, a significant rise from 2020’s numbers that will no doubt be overshadowed by whatever the totals 2022 brings after December.
Despite record handles and gross gaming revenue numbers in New York, though, sportsbook operators are not happy that they are paying so much back to the state.
In the U.S., so far over thirty states have taken advantage of their right to legalize, regulate, and tax their own sports betting market, and part of that process is choosing a tax rate that will generate a decent amount of revenue for residents while remaining fair to the sportsbooks.
Those U.S. sports betting tax rates range from as low as 6.75% in Iowa, 8.4% in Michigan, and 9% in South Dakota with a lot more states charging around 15% to 20%, while a few like Delaware (50%), Rhode Island (51%), and New York (51%) all charge a great bit more.
New York’s 51% rate has upset the sportsbooks taking bets there, including DraftKings whose CEO Jason Robins has helped lobby for a reduction in that tax rate, but so far to no avail, an issue that BetMGM CFO Gary Deutsch sees as discouraging for all operators, saying:
Players would never continue to play if the house always won, and the house cannot continue to play if it’s always going to lose.
Finally, a few New York lawmakers are beginning to get the message.
Assemblyman Gary Pretlow and Senator Joe Addabbo had introduced a bill that would have reduced New York’s sports betting tax rate while keeping the revenue the same by bringing in additional online sports betting operators, but that legislation was shot down last year.
Despite that bill’s failure to advance, it demonstrates a desire for some lawmakers to negotiate a fairer tax rate, and no doubt whatever lower percentage they can come up with it will be appealing to sportsbooks operating there.
This year New York’s legislature is scheduled to be in session until June 10 and another attempt to adjust that tax rate could still be made, so keep checking back for all the latest news and updates on this ongoing story.
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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: [email protected]More info on Mike Lukas
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