New York’s tax on online sports betting is the talk of the town
Once more, one of the topics that receive the most attention in the local business community is New York State’s tax rate on mobile sports betting. As a result, the weekly sports handle fell by US$33 million from the first week of the NFL season. Nevertheless, despite the volume decline, the state still made more in tax income during the week ending September 18, 2022.
A total of nine private sportsbooks are permitted to operate in the state’s mobile sports betting industry. As of September 18, 2022, the nine enterprises in the sector had amassed an online handle of more than US$11 billion since the sector’s opening on January 8, 2022. As a result, over 866 million dollars in GGR and $442 million in tax revenue have been generated.
The market experienced a lot of volume in January because the handle frequently exceeded US$400 million during the first several weeks. While the season is now in its initial games, the NFL playoffs can be used to explain the interest. In addition, the lack of the significant welcome bonuses operators offered at the beginning of the market is another facet contributing to the decline in handling.
The nine sportsbooks are scaling back on marketing and spending far less on promotions because the market has the maturity and the absence of such substantial welcome bonuses. In addition, operators argue that the state’s 51% tax rate is another factor in the decreased interest in online sports betting. And they claim that it impacts the long-term path to profitability.
Assemblyman Gary Pretlow, one of the state’s leading online sports betting proponents, stated this week that the reduced activity is not unexpected. He remarked that there aren’t any incentives because, at the beginning of the market, operators offered free-to-play and match play, which was also included in the state’s total handle. The handle now feels so low because of this.
Mr Pretlow stated that operators are no longer as willing to spend as much money on promotions as they once were due to the 51% tax rate on revenue and promotions. As money is now solely coming from local bettors and not necessarily from the authorised sportsbook applications, including Draftsking, FanDuel, and caesars sportsbook, he predicts that there will be a considerable fall in the handle.
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