Lowering New York's 51% Tax on Mobile Sports Betting A ‘Hard Argument,' Senator Says

With hundreds of millions in tax dollars collected from New York online sports betting, any effort to reduce the 51% tax rate on mobile wagering would take a “credible” argument, a state senator says.

Sen. Joseph Addabbo, D-Queens, told Gambling.com the online bookmaking industry would have to convince legislators that a lower tax rate wouldn’t slash funding for state services.

Addabbo is chairman of the state Senate Committee on Racing, Gaming and Wagering.

“We can’t go back to our constituents and say we reduced funds for education,” he said.

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New York has Nine Online Bookmakers

Since Jan. 8, 2022, when New York launched mobile sports betting, the state has collected more than $709.2 million in tax money from mobile wagering.

This tax revenue was generated by a nation-leading $16.59 billion in bets placed.

In New York, nine mobile bookmakers are authorized to accept bets. They are:. 

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New York’s 51% tax on mobile sports betting is the highest in the nation, along with New Hampshire’s 51%.

With more than 19.2 million residents, New York is the largest state by population size with legal sports betting. It is illegal in the three largest states — California, Texas and Florida.

Effort Expected To Reduce Tax Rate

Since last year’s mobile sports betting launch, New York has benefitted from the tax revenue in several ways, Gov. Kathy Hochul said.

“In just one year, New York has become a national leader in providing responsible entertainment for millions while bringing in record-shattering revenue for education, youth sports, and problem gambling prevention,” she said.

With this level of success, Adddabbo said the mobile wagering industry could have difficulty convincing lawmakers this year to lower the 51% tax rate. The 2023 legislative session began Jan. 4 in Albany and is scheduled to end June 16.

Last year, a bill was floated to lower the 51% tax rate with the licensing of additional mobile sportsbooks. The thought was that extra online bookmakers would generate enough added revenue to offset the tax money lost by lowering the 51% rate. The bill was unsuccessful.

Addabbo recently told Gambling.com that some in the mobile wagering industry might try to make a “credible fiscal argument” for that proposal again this year, but it remains to be seen whether lawmakers will go for it.

“It’s going to be a hard argument,” he said. “We’re already No. 1 in the nation with only nine operators.”

New York City Casinos, iGaming Also in the Mix

At land-based casinos in New York, sports betting has been legal since July 2019.  

New York is home to four upstate commercial casinos and several tribal casinos. An approval process is underway to license three Las Vegas-style commercial casinos in the New York City area. 

Addabbo told Gambling.com he is hopeful those downstate licenses will be granted this year so that additional workers can start getting paychecks as soon as possible. 

In other gaming matters, Addabbo said he intends to try again this session to approve legislation to legalize iGaming in the state. 

This would allow New Yorkers to use mobile devices to play online slots and casino table games such as craps and blackjack for money.

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