New York sports betting operators ask for review of tax rate
Some New York mobile sportsbooks say the 51 per cent tax rate is too high.
US.- Five complete months have gone by since New York mobile sports betting launched but operators are starting to get uneasy. Mobile sportsbooks are subject to a 51 per cent tax on their gross sports betting revenue, the highest online tax rate in the country. Operators are now asking legislators to review that rate.
According to Bloomberg, operators are cutting back on their marketing and promotional offers amid ongoing losses. Companies like DraftKings and FanDuel are asking legislators to lower taxes after agreeing to them just last year.
The average sports betting tax rate in the US is 19 per cent, according to Morgan Stanley. New Jersey taxes online sports betting at 14.25 per cent, while Pennsylvania taxes at 36 per cent. New York also includes promotional credits given to players in the calculation of taxes.
Joe Addabbo, the New York state senator who chairs the Senate’s Racing, Gaming, and Wagering Committee, has noted that operators were aware of the taxes when they competed for licences last year.
New York mobile sports betting market
So far, mobile sportsbooks in New York have taken in more than $7.6bn in bets. The state has collected $263.4m in tax revenue from mobile sports betting.
New York’s sports betting handle in May was $1.26bn, the lowest monthly total since the state opened its regulated online wagering market in January. The figure was 9.4 per cent lower than the $1.39bn wagered in April.
Gross gaming revenue from mobile sports betting in May reached $109.8m, 5.5 per cent higher than the $104.1m reported in April but lower than the $114.3m reported in March and $124.1m in January.
