A newly released report estimates that New York State may benefit from approximately $400 million in annual tax revenue if lawmakers decide to legalize internet gambling.
New York Is Losing Tax Revenue without Legalized iGaming Activities
The white paper was commissioned by Light & Wonder but compiled by the leading provider of regulatory intelligence to the gambling and payments industries, VIXIO Gambling Compliance. The report outlines that through the legalization of online gambling, US states may rake in millions in tax revenue on an annual basis.
According to the recent whitepaper, one market that holds significant potential is the one in New York. Currently, the state offers retail sports betting activities. Only recently, New York launched its online sports betting market as well. Since the launch back in January, the market proved to be an incredible success and surpassed records for betting handle set by other US states that have offered the activity for years.
iGaming Activities May Bring Higher Tax Revenue than Sports Betting
Currently, six US states are offering legalized iGaming activities. Those states are New Jersey, Pennsylvania, Michigan, Delaware, West Virginia and Connecticut. Nevada also offers legal iGaming but the activities are restricted to online poker. According to the recent white paper, the internet gaming tax revenue generated by those states was approximately $970 million last year.
The recent white paper compares the tax revenue generated by iGaming to the tax revenue from sports betting. Based on figures released in the report, although sports betting is available in 30 US states, last year, it generated only $560 million in taxes. This comparison once again reaffirms how much potential iGaming legalization and taxation hold.
Country-Wide Online Gambling Legalization May Bring Billions in Taxes Every Year
It’s not only New York State that may benefit from legalizing internet gambling. Florida, a state with a 17.5 million population may rake some $487.8 million in annual taxes from the activity, according to the white paper. Similarly, California with its 31 million population may even get nearly two times as much from taxing iGaming. The white paper predicts iGaming tax revenue in California to bring $853.1 million annually.
Focusing on the bigger picture, the report predicts billions in annual tax revenue if iGaming is legalized in more US states. In particular, the white paper estimates that taxes from internet gambling, if all 42 states that have legal land-based casinos legalize the activity, would hit $6.35 billion annually. This number once again assumes a tax rate for iGaming activities of 20%.