Those who were hoping New York’s 51 percent tax rate for sports betting would get reduced are probably in for some disappointment. New York state assemblyman Gary Pretlow told Legal Sports Report that the rate isn’t budging anytime soon.
Sports betting was legalized in the Empire State in 2022 and nine operators launched in January. In the first month of operation, the state saw a handle of $1.17 billion.
As of December 2022, sportsbook operators had pulled in $15.2 billion in wagers and the state saw revenues of $638.5 million.
Still, some would like to see the tax rate of 51 percent lowered. It is the highest rate in the country, passing second-place Pennsylvania, whose rate is 36 percent.
Pretlow tried to get a bill passed that would increase the number of operators in New York and lower the tax rate. The legislation did not pass, however.
“I tried to make it go away because I thought (the tax rate) was exorbitant,” Pretlow told LSR. “But the operators are doing it, so I’m not going to take from education for them to make more money. “So I’m pretty sure it will (stay).”
Not surprisingly, the nine sports book operators in New York are vehemently against the 51 percent tax rate. They agreed to it, though, to gain access to the lucrative New York market.
FanDuel’s CEO Peter Jackson and DraftKings’ CEO Jason Robins were both early critics of the tax rate, saying it was excessive. Other sportsbook executives have echoed their sentiments.
“Well, the tax rate is ridiculous,” Caesars CEO Tom Reed told LSR. “New York chose a big cut of a smaller pie than they could’ve had in sports betting. They’ll have another bite at that with iGaming. California would have the ability to choose a smaller cut of a much bigger pie. I think the state would end up better off.”
Pretlow said he remains confident he can get the tax rate lowered and said that he would try and reintroduce the legislation in the upcoming session.
