New York has continued its record success in the sports betting industry and has established itself as the top market. Sportsbook operators are subject to a tax rate of 51 percent based on revenue which is the highest in the nation.
Possible Discussions Regarding the Empire State’s Tax Rates
There is no doubt that sportsbooks that conduct business in the Empire State have enjoyed success since launch, which happened not too long ago. However, the tax rate is very high and could affect the lesser-known sportsbooks that have received or will receive approved licenses.
Sen. Joseph P. Addabbo Jr. stated to a media source that discussing the tax rate matter is too early. He stated that these online bookmakers knew before the launch of what the tax rate would be to operate in the state.
As earnings season approaches for these sportsbook companies, this matter has definitely crossed the minds of the CEO and others who oversee the day-to-day operations. During an earnings call with analysts this month, DraftKings CEO Jason Robins stated that there was talk circulating in regards to state lawmakers pushing for a lower tax rate based on revenue.
Robins stated that DraftKings is taking a “wait-and-see approach” to the possibility of a lower tax rate; however, it will not happen overnight. Even without a lower rate, he expects that DraftKings will be profitable in the Empire State in two to three years.
More Online Platforms Under Consideration in New York
Talks on lowering the state’s tax rate may not be imminent, but other discussions and considerations may favor the online providers in the state in this legislative session. Addabbo is the chair of the Senate Committee on Racing, Gaming, and Wagering.
The legislative session began in Albany on January 5th and is set to continue until June 2nd. One option that could come together is having sports betting and horse racing on one app rather than separate platforms. Addabbo believes that this would change New York’s horse racing industry.
He also stated that the lawmakers in the Empire State may look to increase the number of online platforms often referred to as skins. Most of the online sportsbooks that received licenses have launched, with two out of the nine getting ready for launch.
BallyBet Expected to Launch Soon
BallyBet is expected to launch at some point during the first half of the year. Genting’s Resorts World will also be given the green light once the company is operational there.
New York has become the sports betting capital of the industry in the United States. The state is home to nearly 20 million people and is the fourth most populous state in the United States. California, Texas, and Florida all have a higher population, but these three states do not have an established sports betting market.
Addabbo expects that March Madness will generate impressive sports betting numbers just like the Super Bowl did in February. The tournament is set to begin on March 15th on neutral sites across the United States.