Bill Proposed To Increase Online Sportsbooks In New York, Slice Tax Rate In Half

Written By Grant Lucas on January 19, 2023

A bill emerged in the New York Senate to increase the number of online sportsbooks in the Empire State while decreasing the existing sky-high tax rate as a result.

Sen. Joe Addabbo, a key contributor to the launch of online sports betting in New York, introduced S 1962 that “(a)mends the definition of wager and changes the licensing requirements for mobile sports wagering operators.”

Simply put, the goal of the bill is to increase NY sports betting operator from nine to 14 sportsbooks by Jan. 31, 2024, and 16 betting apps by Jan. 31, 2025. The resulting tax rates would reflect how many sportsbooks exist in New York.

NY sports betting bill to lower tax rate by adding operators

As it stands, the online sports betting market in New York features nine online sportsbooks, as allowed by state law. Those operators earned entry into the Empire State via a competitive bidding process that also involved proposing tax rates. The higher the proposal, the more points they received, the more likely they were to receive licensing.

Which is how we go to 51%, a rate operators agreed to pay for 10 years.

Now, Addabbo, via S 1962, has proposed a sliding-scale tax rate based on how many online sportsbooks operate in New York.

  • 4-5 operators: 64%
  • 6 operators: 62%
  • 7 operators: 60%
  • 8 operators: 58%
  • 9 operators: 51%
  • 10-12 operators: 50%
  • 13-14 operators: 35%
  • 15 or more operators: 25%

As Addabbo told PlayUSA, this bill serves as “possibly starting a budget discussion on the topic,” noting that he reintroduced bills from last yearAssemb. Gary Pretlow intends to do the same in the Assembly.

Other details of proposed bill

Increasing the number of operators and thereby decreasing the tax rate earn the spotlight. But within the bill, some other details draws interest.

For starters, the bill redefines “gross revenue” to exclude bets placed via promotional wagering credits. Sportsbooks in New York currently do not enjoy that luxury. Of course, this would affect how much tax revenue the state collects.

In addition, while the initial competitive bidding process left out the likes of Barstool SportsbookFanaticsBet365 and theScore, among others, this proposal would allow them to find another way to New York.

How? By paying a one-time licensing fee of $50 million, double the amount paid by the original NY sports betting selectees.

How likely is it that Addabbo’s bill will pass?

As Addabbo noted to PlayUSA, this only serves as a conversation starter.

In 2022, the first year of online sports betting in New York, operators generated over $16 billion in handle and paid nearly $700 million in state tax revenue. “Incredible” numbers, as Addabbo put it, and tops among US jurisdictions with legal sports betting.

Addabbo noted that he would welcome any proposal to expand and improve the NY sports betting industry. But, he added, it would have to benefit customers and the state.

“Until that argument is made,” Addabbo said, “an argument against what’s happening right now is hard to make.”

Photo by PlayNY; AP / Hans Pennink
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Grant Lucas

Grant Lucas is the senior managing editor for PlayNY. A longtime, award-winning sports writer, Grant has covered gambling and legal sports betting since 2018, when he got his start reporting on the New Jersey and Pennsylvania industries. He now oversees PlayNY as New York expands legalized gambling to sports betting and online casino gaming.

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