Poll: Executives Don’t Want Other Key States Copying NY Sports Betting’s 51% Tax Rate

Written By Mike Mazzeo on June 14, 2022

Executives in the US sports betting industry hope other states don’t copy New York’s 51% tax rate. 

That’s according to a Nov. 2021 survey by VIXIO GamblingCompliance in partnership with SBC Summit North America. 

Nearly 29% of the 145 executives polled believe the high New York online sports betting tax rate model being replicated in other key states is the biggest concern regarding the future of the US sports betting market. 

That was followed by federal legislation (14%), policy backlash against advertising (13%), public concern over rising rates of problem gambling (11%) and increase in tax rates by established states (10%). 

Sports betting executives: Don’t be like New York

Key states like California, Florida and Texas are still seeking to legalize online sports betting via the often arduous and frustrating legislative process. 

Many in the New York government would argue that the 51% tax rate was designed to do exactly what it is doing: making the state a ton of money in NY sports betting revenue. 

Through May, New York had amassed $267 million in tax revenue and is already on course to reach the $500 million threshold much earlier than expected (FY2024). 

But NY online sportsbook executives have repeatedly complained about the tax rate hindering their respective paths to profitability. Lobbying and legislative efforts to reduce the tax rate via an increase in the number of operators have failed thus far. 

They’ll pick up again down the road. Although it’s unclear why the state would be willing to make a change unless revenues remained the same. Especially when operators knew what they were getting into when they signed on to secure such lucrative market access. 

The vast majority of both NY market and revenue shares consists of FanDuel, DraftKings, Caesars and BetMGM.  

NY projected to be No. 2 in 2025

Executives polled in the survey also believe New York will have the second-largest online sports betting market by 2025. Only California topped the Empire State. 

California received 27% of the vote, followed by NY at 24%. Rounding out the top five: New Jersey (18%), Florida (12%) and Texas (11%). 

Morgan Stanley has projected NY could be a $1.7 billion state in gross gaming revenue from sports betting in 2025. 

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Mike Mazzeo

Mike Mazzeo is the Lead Writer for PlayNY, arriving after covering several of New York's professional sports teams in a variety of roles for the past decade. Previously, he served as a beat writer and columnist covering the Brooklyn Nets (ESPN) and New York Yankees (New York Daily News). Mike also covered both the MLB and NBA nationally for Yahoo Sports. In addition, he served as a general assignment reporter for ESPN NewYork.com. He has also had bylines in the New York Times, New York Post, Newsday, Forbes and The Ringer. With PlayNY, Mike brings extensive coverage and unique story angles to what is projected to be one of the biggest and most lucrative online sports betting markets in the country. It's been an arduous and confounding process to get here, but 20 million New Yorkers (many of them die-hards) are now legally able to bet on their favorite sports teams across the state via online and mobile platforms.

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