When you sign-up through links on our site, we may earn an affiliate commission. Learn more >
At Recent Hearing, NY Sportsbooks Admit They Are “Shrinking” Due to 51% Tax Rate
DraftKings CEO Calls For 36% Tax Rate in New York to Prevent “Draconian Measures”
NY Sen. Addabbo Proposed Bill to Lower Rate to 25% Once NY Gets 15+ Sportsbooks
Right from the start, the state of New York went big with their legal sports betting market including the 51% tax rate they charge sportsbooks to operate, except those companies are now saying that the gambling surcharge is too steep to sustain the current profit level of that market.
Those complaints and “gloomy pictures” came from leaders of DraftKings and FanDuel during a recent hearing with state lawmakers in Albany that lasted almost four hours, a needed chance to air their frustrations, according to reporter Heather Fletcher of NY Sports Day (NYSD).
Retail sports gambling in New York has been legal since 2019 and the mobile market opened up there in January 2022, and since then those bettors have generated a $16.7 billion handle which has created $1.4 billion in sportsbook revenue and $695 million in taxes for the state.
Impressive numbers, however at that hearing operators told state lawmakers “that revenue is unsustainable at the current tax rate,” according to NYSD, with FanDuel President Christian Genetski saying betting is down 20% since right after NY mobile sportsbooks launched.
DraftKings CEO Jason Robins said New Jersey’s operation is growing faster than New York’s, and that the solution for growth lies in lowering that rate to attract more operators to the market.
There is no shortage of suggestions on how to revamp the taxing structure of New York’s legal sports betting market, but all of them involve lowering the 51% tax rate (the highest in the U.S.) to something more reasonable, with each solution including a different set of factors.
Fletcher reports that DraftKings CEO Robins said that if New York drops its sportsbook tax rate to 36%, which is what operators pay in Pennsylvania, his company may not have to take “draconian” measures to remain profitable in the state, a subtle but effective threat.
Those measures include New York sportsbooks offering “worse odds” than in other states as well as reducing the value of its promotions to gamblers and eliminating “meaningful” partnerships with sports franchises and venues, according to NYSD.
Assemblyman J. Gary Pretlow reportedly pushed back on Robins’ statement about New York sportsbooks providing worse odds, calling it “collusion that would lead to a state investigation.”
One solution by state Sen. Joseph P. Addabbo Jr. seems to be getting some attention.
Currently, in New York, there are nine mobile sportsbooks operating and one solution to market shrinkage has been proposed by Sen. Addabbo in the form of a bill to lower the 51% tax rate to 25% once there are 15 or more New York sportsbooks.
That proposed legislation would reportedly nearly double the legal sports betting sites from the current nine to 16 by the 2025 Super Bowl, a potential solution that keeps tax revenue high presumably based on having more handle and sportsbook revenue to tax.
New York’s 2023 legislative session runs from January through the end of December, enough time for lawmakers to debate, compromise, and move forward with a plan that satisfies all parties involved, an ongoing story we will continue to update as more news emerges.
BetMGM To Become Sports Betting Partner of the Boston Red Sox
Betting | 15 March - 08:59 | Caleb Tallman
MGC Approves BetWay for Sports Betting License
Betting | 1 March - 16:16 | Caleb Tallman
Two Bills Give Hope for 2023 Georgia Sports Betting Legalization
Betting | 22 February - 06:19 | Caleb Tallman
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
© Rebel Penguin ApS 2023 (a subsidiary of Gaming Innovation Group Inc.)
We support responsible gambling. If you feel like you're losing control over your gambling experience, call 1-800-GAMBLER (NJ, PA, WV), 1-800-9-WITH-IT (IN), 1-800-BETS-OFF (IA), 1-800-522-4700 (NV), 1-800-522-4700 (CO, TN), 1-855-2CALLGA (IL), 1-800-270-7117 (MI).
WSN.com is registered with the New Jersey Division of Gaming Enforcement (DGE) under affiliate vendor ID 89744, with the Indiana Gaming Commission (IGC) under certificate of registration number SWR-000148, approved by the Pennsylvania Gaming Control Board as a gaming service provider, under certificate registration number 117656-1, possesses a Vendor Minor sports betting license from the Colorado Limited Gaming Control Commission (account number 94414163), granted a vendor registration number VR007603-20-001 by the Michigan Gaming Control Board, an interim Sports Wagering Supplier license, under license number SWS 066, issued by the West Virginia Lottery Commission, a sports betting vendor registration, under registration number #100400, issued by the Director of Gaming Licensing and Investigations of the Virginia Lottery to operate in the State of Virginia, and a Vendor Registration issued by the Sports Wagering Committee of the Tennessee Education Lottery Corporation.
Advertising disclosure: WSN contains links to online retailers on its website. When people click on our affiliate links and make purchases, WSN earns a commission from our partners, including ESPN and various sportsbooks.