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New York Sports Betting Tax Rate Sports Betting

New York Sports Betting Tax Rate to Remain at 51%

By Blake Roberts Founder & Editor in Chief Updated: 24 January 2022

Blake Roberts Founder & Editor in Chief

Blake Roberts is the founder of Betting.US and is currently heading the creative team as Editor in Chief. Born and raised in Morgantown, West Virginia, Blake is a great sports fan, with football and basketball being his favorite. He’s our trusted voice for all betting-related matters.

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According to the most recent information, 27 US states have now formally legalized corporeal and mobile sports betting, following the decision of the Supreme Court to strike down the controversial PAPSA legislation back in May 2018.

This fast-growing number includes the iconic state of New York, which was initially reluctant to the idea of mobile sports betting and has seen numerous iGaming bills fail in recent years.

However, there are now a number of NY online sports betting sites available to punters, who can access a range of wagering markets through various devices.

In this post, we’ll discuss the changing legislature behind the legalizing of mobile sports betting in the Big Apple, while asking why one state lawmaker is keen for licensees to adhere to the predetermined tax rate.

Sports Betting in New York – The Story So Far

After protracted negotiations and amendments, an online and mobile sports betting bill was finally signed into law by Governor Andrew Cuomo on April 21st, 2021.

Ultimately, eight selected online platforms (which were confirmed as virtual sports wagering licensees on November 8th last year) will double as mobile operators and collectively operate nine virtual sportsbooks statewide.

In fact, the first four live mobile sportsbooks launched officially in New York on January 8th, namely BetRivers, Caesars, DraftKings and the market-leading FanDuel.

What’s more, the remaining five operators are expected to launch imminently, with BetMGM, Bally Bet, Points Bet, Resorts World and WynnBet all poised to receive the green light from the New York senate.

When entering into a formal agreement, New York’s mobile sports betting licensees agreed to a 51% tax rate in the Empire State market. This has been the source of some consternation, while also inspiring a brand new bill to help guarantee compliance with this going forward.

Bill A8658 and Controversy Surrounding Remote Betting in NY

While there’s no formal suggestion that any of the accepted operators have looked to negotiate the 51% tax rate down, New York Assembly Racing and Wagering Committee Chair J. Gary Pretlow has taken proactive action to prevent such an instance occuring in the future.

More specifically, Mr Pretlow has sought to ensure that operators stick to their initial commitment, creating a formal bill (A8658) to prohibit licensees from requesting any change or reduction in the agreed tax rate.

This rate would be frozen once a contract or licence has been awarded by the state of New York, while it would remain the same for all operators across the board.

The bill was unveiled on January 10th, and just four days before, Pretlow had opined that “the rate might deter operators from bidding or offering the kinds of business-building promotions seen in other states”.

He was also concerned about the diversity of licensee applicants and the lack of ambitious independent brands looking to participate in the marketplace, while there’s a belief that larger operators would strive to reduce their tax burden once they’d cornered the sector.

Pretlow has been quite outspoken about New York’s online and mobile gambling bill, previously expressing his frustration with the state’s wider sports betting selection process.

Once again, his major concern was focused on a perceived lack of diversity, which ensured that only the market’s leading players participated and some smaller applicants in the state were actively deterred from throwing their hats into the burgeoning mobile betting space.

The Last Word – What Happens Next to Remote Sports Betting in NY?

For now, there are no plans to open up the process further or accept additional mobile sports betting bids, so Pretlow’s bill may only impact the eight already licensed platforms if it was to pass in the state senate.

This would also bind the 51% tax rate and cement this in law for the foreseeable future at least, until further growth or diversification of the marketplace or the emergence of a concerted legal challenge.

In the meantime, Pretlow’s hastily brought legislation is awaiting a hearing by the New York State Assembly Racing and Wagering Committee. The committee is currently vetting a large selection of bills for consideration during the 2022 regular session of the NY State Legislature, which will continue until early June.

If the 51% tax rate is maintained, New York will maintain one of the most stringent levies in the burgeoning sports betting marketplace. Pretlow may also be proved right in terms of the competitiveness of the space as a result, as all but the largest operators could be priced out of the market.

Regardless, this will be an interesting space to watch in the future, particularly once all nine operators are fully active and taking virtual wagers.