Cuomo Spokesman Blasts Critics As New York Claims Online Sports Betting Tax Revenue Record

Written By Mike Mazzeo on May 24, 2022

With New York quickly surpassing all other states in tax revenue from online sports betting, a spokesman for ex-Gov. Andrew Cuomo blasted opponents of the state’s controversial 51% tax rate.

“From the beginning, we sought a structure that benefited taxpayers while the industry and the legislative representatives fought us tooth and nail in order to reap more of the profits for themselves. They said it wasn’t going to work but the proof is in the score — Taxpayers 1, Hacks 0,” Cuomo’s spokesman, Rich Azzopardi, said in a statement provided to PlayNY via email.

The Empire State has collected more than $250 million in taxes from online sports betting alone through May 15. Legal online sports betting launched in NY on Jan. 8. Over that span, NY online sportsbooks have combined for $6.9 billion in handle and $491.3 million in total gross gaming revenue (GGR).

Chart of Online Sports Betting Tax Revenue

The record for tax revenue from all-channel sports betting is still narrowly held by Pennsylvania — $256.4 million through April at a 36% tax rate. The Keystone State, though, launched online sports betting in May 2019.

Sportsbooks continue to deride NY sports betting tax rate

Sportsbook executives have continually ripped NY’s 51% tax rate as they seek to become profitable over the long term.

“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,” BetMGM CFO Gary Deutsch said during the entity’s latest earnings call.

The 51% tax rate has led NY betting apps to cut back on player acquisition and promotional spend.

“Clearly people are going to have to learn in that state to live with much lower levels of generosity throughout our process to have any chance of making any sort of contribution,” Flutter CEO Peter Jackson said.

DraftKings CEO Jason Robins has also been outspoken over his disdain for the 51% tax rate. FanDuel, DraftKings and Fanatics (which wasn’t selected for a NY online sports betting license) have been among the entities that have lobbied for a tax reduction.

Lawmakers had proposed lowering tax rate

Local policymakers Assemb. Gary Pretlow and Sen. Joe Addabbo introduced legislation that would’ve reduced the tax rate by bringing in additional online sports betting operators.

The bill language called for the Empire State to go from nine NY sportsbooks to no fewer than 14 by Jan. 31, 2023 (which would lower the tax rate from 51% to 35%) and no fewer than 16 by Jan. 31, 2024 (which would lower the tax rate from 35% to 25%). Addabbo and Pretlow originally advocated for a tax rate more in line with New Jersey, which imposes a 13% rate.

The bill was included in the one-house budgets for both the Senate and the Assembly — albeit with different language — but failed to advance in negotiations. It will be revisited down the road. But for now, the state is cleaning up on the tax revenue side — with 98% of revenues going to educational funding.

NY sports betting flourishing despite early pushback from Cuomo

Cuomo was forced to resign after an independent investigation found that he sexually harassed multiple women.

Previously, he frustrated Addabbo and Pretlow with his anti-gaming stances. This led NY bettors to wager in neighboring states like NJ and PA — in addition to unregulated offshore sportsbooks and local bookies. It also cost the state billions in potential revenue.

“(Former) Gov. Cuomo was very aloof when it came to gaming situations in the state of New York,” Addabbo told PlayNY in Sept. 2021. “We’ve lost billions since the Supreme Court said we could do mobile sports betting and sports betting in general. And why? Because our governor didn’t really think it was a priority. He didn’t embrace it like (New Jersey) Gov. Murphy did. I thought we should’ve. New York is one of the sports capitals of the world. We should’ve been out in front. And we’re not. It’s been so frustrating.”

But with New York on the verge of setting the all-time tax revenue record from online sports betting, it’s hard to argue that the 51% tax rate hasn’t been anything but a massive success for the state. At least in the short term.

Photo by AP / Seth Wenig
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Mike Mazzeo

Mike Mazzeo is a contributing writer for PlayNY, reporting on legal sports betting in New York while covering the potential legalization of NY online casinos and poker. He previously wrote for ESPN, the New York Daily News and The Ringer, among others.

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