Online gambling expansion proposed by Sen. Addabbo, with proposed tax rate reduction included.
Upping the Stakes: New York's Push for Lower Online Sports Betting Taxes
New York's online sports betting scene has been on a roll for about a year, but some crafty politicians are plotting to crank it up a notch by trimming the tax rates.
EnterSB S1962, the brainchild of Senator Joe Addabbo. If this bill gets the green light, it'll invite more sportsbooks into the Empire State and slash those hefty tax rates. The Senate Committee for Racing, Gaming, and Wagering is now scrutinizing this baby.
Addabbo's bill ponders expanding the definition of sports wager, tweaking operator licensing rules for mobile sports betting, and adding new sportsbooks to the mix. By 2025, we could see up to seven fresh faces jostling for position in New York's sports betting ring. Boom!
Under this bill, the minute the 13th license is snatched up, the online sports betting tax rate plummets to 35%. And once the 15th operator plants its flag, taxes take another nosedive to a smooth 25%. Worth mentioning – new sportsbooks will need to stump up a fat $50 million for their license fee.
So, are the current players grinning or grinding their teeth? Online sportsbooks in the Empire State are presently groaning under a 51% tax rate – one of the highest in the States. Big names like BetMGM and Caesars Entertainment have anger-whispered threats about scaling back operations in the state, with the latter's CEO, Tom Reeg, shaking his head in disbelief over the existing tax rate. Calling it "ridiculous" definitely catchy, Tom!
Despite the grumbling, the high tax rate has been a goldmine for the local economy. Last year, sports betting operators coughed up $693 million in taxes. Sure, it sounds downright juicy, but high taxes might have a boomerang effect, causing certain operators to pack up and leave.
Lawmakers might be reluctant to rock the boat, considering a previous measure proposed by Gary Pretlow couldn't see the light of day earlier this year.
Tax Evasion 101: What's under the hood of SB S1962?
The nitty-gritty of SB S1962's proposed tax rate hasn't officially tiptoed out yet. New York's present tax rate stomps on operators' profits at a whopping 51% of their sports betting revenues.
The bill doesn't explicitly mention a revised tax rate, leaving the industry in limbo. With the existing rate wielding a scepter as one of the highest in the nation and reaping around $400 million in taxes so far[1], any moves should be watched closely.
For now, operators will just have to hang tight, navigate the current tax rate, and keep their fingers crossed for a more favorable climate in the future. After all, the only certainties in life are death, taxes, and sports betting – in that order, right?
[1] Source: [][1] "An Overview of the Sports Betting Market in New York." Underdog Statesman, June 2022. Accessed June 20, 2023. URL: https://underdogstatesman.com/reports/an-overview-of-the-sports-betting-market-in-new-york/
- The proposed sports betting bill, SB S1962, aims to lower tax rates for online sports betting in New York, potentially attracting more sportsbooks and redefining the sports wagering landscape.
- The bill could significantly impact policy-and-legislation surrounding sports betting, as the current 51% tax rate on sports betting revenues is one of the highest in the nation, generating millions for the local economy.
- The nitty-gritty details of the proposed tax rate in SB S1962 have not been made official yet, leaving the sportsbook industry in a state of limbo, hoping for a more favorable climate in the future.
