The Empire State reached its six-month anniversary for online sports betting this month, and those involved had every reason to celebrate New York’s position in the market.
Governor Kathy Hochul went on record to reveal the state had taken in more than $300 million in tax revenue from online sportsbooks, which have been in operation since January 8. The announced revenue return puts New York ahead of Pennsylvania and New Jersey in collecting taxes from online and retail sportsbooks in the previous four years.
“In just six months, New York has become a leader among states in implementing successful gaming policies, with hundreds of millions of dollars going to important programs that will improve the lives of all New Yorkers… I look forward to continuing to enact responsible gaming policies that provide exciting entertainment for New Yorkers of legal age – all with important safeguards in place to help those who need it,” Hochul said.
New York tax revenue for the 2021/22 fiscal year has far exceeded the projected $249 million, which ended on March 31, as $200 alone came from licensing fees. Overall, the state finished with more than $360 million from sports betting in that fiscal year.
New York isn’t slowing down for the 2022/23 fiscal year, with expectations of $357 million from sports betting tax revenue. The first quarter of the 2022/23 fiscal year has already generated $152 million, and with the NFL season just around the corner, this number is guaranteed to beat their projected forecast for 2022/23.
The executive director for the New York State Gaming Commission, Robert Williams, said: “The numbers and timeline clearly indicate that New York’s model successfully harnessed the excitement of sports wagering and continues to maximize its potential.”
Everything Points to Tax Percentages
New York officials announced one of the highest tax rates in the country s on gross gaming revenues (51%) upon their arrival to the market; this approach was the workings of Hochul’s predecessor, Governor Andrew Cuomo.
Legalized sports betting in New York has been legal since 2019; however, it remained at a retail level. Lawmakers eventually won the battle to legalize online sports betting, but Cuomo only accepted this notion during the COVID-19 pandemic. At the time, New York faced a multi-billion loss because of the closures that hit the state tax revenue streams.
Budget negotiations in 2021 saw Cuomo encourage operators to bid for licenses while he set up a process to ensure operators would have to surrender half of their gross gaming revenue.
Since the launch of online sports betting in New York, operators have lobbied to reduce the tax rate. Unfortunately, that’s been t no avail. There were also talks about expanding sports betting to provide licenses to all operators who applied in 2021. But again, traction wasn’t gained as nothing came to fruition.
The expansion of sports betting could become a topic in Albany when the legislature convenes next year. The likelihood of additional operators receiving licenses will be raised if the gaming committees can legalize online casino gaming in the state.
Sports betting taxes are currently funding the state’s education programs. To add, $5 million in tax revenues directly assists athletics programs for underserved youth, and a further $6 million will fund problem gambling services.