Flutter CEO Peter Jackson said Big Apple bettors will need to get accustomed to receiving lesser promotions than FanDuel customers in other states, given New York’s high 51% tax rate.
FanDuel Sportsbook, a subsidiary of Flutter, has dominated in New York since legal online sports betting launched. Through April 24, FanDuel has amassed a handle of $2.2 billion (out of $6 billion total) for an industry-best 37% market share.
High tax rate means lesser promos for NY sports betting
FanDuel didn’t offer insane NY online sports betting promotions like its competitors, such as Caesars.
Rather, it relied on brand recognition and a smooth betting app that has merited acclaim in the industry. As a result, FanDuel New York said it exceeded expectations with its NY launch, “representing the fastest penetration of our daily fantasy sports player base to date.”
“Clearly in that (New York) market, with the level of taxation, we’re seeing a more exaggerated version of that with competitors pulling back their level of generosity in the market, and to some extent, we’ve done something similar,” Jackson said as part of an answer comparing the rest of the US market to New York on the entity’s latest earnings call.
Continued Jackson:
“The one thing I’d highlight in New York is that we have seen a much faster penetration of our DFS base in that state than what we’ve seen in any other state. And, basically, that’s given us an even bigger acquisition cost advantage than we’ve seen anywhere else, and we think that’s going to set us up very well in that state if there are no subsequent tax changes.
“And clearly people are going to have to learn in that state to live which much lower levels of generosity throughout our process to have any chance of making any sort of contribution.”
Could NY sports betting tax rate decrease down the road?
Local policymakers introduced legislation to increase the number of online sports betting operators in NY. A byproduct of the legislation would lower the tax rate.
The proposal, however, met rejection. Part of the reason: The state currently reaps the benefits of $210.3 million in NY sports betting tax revenue to date. Regulators also tax NY sportsbooks on promotional spend.
Sen. Joe Addabbo and Assemb. Gary Pretlow will revisit a potential tax reduction for operators toward the end of the year.
