New York is officially on the clock as lawmakers will start pushing for the iGaming market to enter the Empire State. FanDuel and DraftKings’ efforts to help reduce the 51 percent tax rate have stalled, but the online casino may provide more aid as the operators want to become profitable in the sports betting capital.
Mobile Casino Gaming Will Be Lucrative
As of late, Sen. Joseph Addabbo has been front and center of what’s happening during the legislative session.
The senator’s latest iGaming bill S4856 features a 30.5 percent tax rate, which is well below the sports betting tax rate.
During a joint hearing, Addabbo stated that New York loses approximately $4 billion annually due to its failure to legalize iGaming, which is significant in terms of unrealized funds for education and youth sports. In this process, all nine sportsbooks will be grandfathered.
No matter how anyone dissects it, iGaming will be much more lucrative than sports betting. For example, during the summer slowdown, which takes place between late June to early August, neighboring states like New Jersey and Pennsylvania have relied on online casinos to supplement the lack of sports betting volume.
iGaming Faces Issues in the Empire State
The iGaming market’s projections are promising, but the venture faces an uphill battle because the initiative didn’t appear on Gov. Kathy Hochul’s executive budget proposal for FY2024.
Sen. Addabbo knows it’s a bad sign, but the advocates will make a strong push, regardless of the situation. Howard Glaser, global head of gaming affairs for Light & Wonder, told a news source:
“The iGaming bill would raise in the neighborhood of $800 million in revenue for the state. This should be much more palatable to the legislature than the tax increases, like the commuter tax or the corporate franchise tax that were proposed in the Governor’s budget.”
Sen. Joe Addabbo and Assemb. Gary Pretlow have also looked at adding other betting markets to appease the frustrated sportsbook operators. These included betting on future awards like the Heisman trophy winner.
Bookmakers Continue to Fight for Tax Rate Deductions
FanDuel and DraftKings want iGaming to push for the operation to become a part of the state because it would help these companies have a clearer path to profitability. With all this factored in, the sports betting department keeps facing issues due to the high tax rate.
In the first full year of sports wagering, New York generated $16 billion in gross tax revenue. Due to the 51 percent tax rate, the state collected over $700 million in tax receipts, which surpasses any other state by a significant amount.
Unless a change is made, Robins said DraftKings could be forced to offer lower odds and fewer promotions to customers. However, the legislators weren’t swayed by the threats, as the projection for FY2024 is closing in at $900 million.
Lawmakers are hesitant to make sudden changes because sound evidence and studies need to be conducted because they don’t want the funding to hit a roadblock. Additionally, Sen. Addabbo stressed the importance of responsible gaming in the legalization process because problem gambling has been on the rise.
If the iGaming bill doesn’t get passed during this legislative session, supporters will make a stronger push in the 2024 session.