A lot of folks thought the tax rate of 51 percent for New York sportsbooks was way too high. Yet in the early going this year, mobile betting still broke all records for handle. The state has generated $104.4 million in tax revenue from $3.16 billion in sports betting handle, according to PlayNY.
Not wishing to rest on the state’s laurels, Assemblyman Gary Pretlow introduced an amendment to lower the rate for online sportsbooks by bringing in additional skins over the next two years. Senator Joe Addabbo plans to introduce a matching amendment in the Senate, according to NY Online Gambling.
The bill calls for the number of approved sportsbooks from nine to at least 14 by January 31, 2023, which would lower the tax rate to 35 percent. Then push to reach a minimum of 16 skins by January 31, 2024, bringing the tax rate to 25 percent).
“Gary and I always had this vision of increased skins. We’ve done this well with only seven (recently eight) active. But that just goes to show you that more skins would possibly make us even more competitive,” Addabbo told PlayNY.
The next round of sportsbooks includes Bet365, Fanatics, Penn National Gaming/Barstool Sports, FoxBet and theScore, along with those who made no bid at all.
Pretlow’s bill also seeks more minority-controlled operators. Fanatics, which was left out, planned to name Jay-Z as vice chairman as well as being a board member. Minority policymakers have made their disappointment known for failing to bring in minorities.
Pretlow said the process made it difficult for smaller operators to compete in the state and made for a less diverse group of operators.
Losing bidders from the initial round of applicants would be automatically eligible to reapply, operators that did not bid in the first round also are eligible, the deadline for 2023 submissions is Sept. 1, and at least two licenses are reserved for businesses that are at least 5 percent minority owned.
“I think it will increase the sustainability of the market, but the tradeoff is likely less tax revenue, at least in the short term,” said policy analyst Ulrik Boesen of the nonprofit Tax Foundation.
Addabbo said, “If the intent is with the NYS Gaming Commission and the governor’s office to have this conversation, we should have it. But if there’s not then we’re going to stick to the 51 percent and the sound, solid base that we’ve already formed with mobile sports betting in NY.”
