Sen Addabbo Proposes More Online Sportsbooks, Lower Tax Rates
Senator Addabbo introduced a measure that would increase the number of online sportsbooks by 7 and would reduce the tax rate to 25%
Online sports betting has been legal in New York for about a year now. The market is flourishing but some politicians are seeking to expand it further, which would result in a decrease in tax rates.
Senator Addabbo Wants to Welcome More Sportsbooks into the Empire State
Introduced by Senator Joe Addabbo, SB S1962 is a measure that, if passed, would increase the total number of licensed sportsbooks. This would, most importantly, decrease the overall online sports betting tax rate. The measure was introduced by Addabbo yesterday and handed to the Senate Committee for Racing, Gaming, and Wagering.
As outlined in the measure, it would “amend the definition of sports wager to include other things of value.” It would also introduce important changes to the licensing requirements for operators that wish to offer mobile sports betting products. Lastly, it envisions the introduction of several new sportsbooks and the adjustment of tax rates in accordance with the number of operators.
According to SB S1962, the New York State Gaming Commission is to have fourteen licensees by January 31, 2024, and sixteen operators by January 31, 2025. In short, if the bill passes, New York will issue licenses to seven new sportsbooks by 2025.
As soon as the 13th license is issued, the New York online sports betting tax rate would fall to 35%. Then, once the 15th operator hits the market, the rates would be further reduced to 25%. The bill also notes that new sportsbooks would have to pay a $50 million licensing fee.
Sportsbooks Are Unhappy with the Current Tax Rate
As of the time of this writing, New York’s online betting market has nine licensees, which are being subjected to ruthless taxation. Online sportsbooks in the Empire State have to pay 51% of their revenues as taxes.
Major operators have been quite unhappy with the state of affairs, with BetMGM threatening to tone down on its operations in the Empire State and Caesars Entertainment’s chief executive officer, Tom Reeg, calling the tax rate “ridiculous.”
Despite the disgruntlement of operators, the 51% tax rate has been quite beneficial to the local economy. According to official data, online sports betting operators paid $693 million in taxes last year. While this may seem lucrative at first glance, high taxes may prove to be a double-edged blade as certain operators are now considering decreasing their operations in the state.
Yet, lawmakers may be unwilling to risk the current profitability as a previous measure, introduced by Gary Pretlow in March 2022, could not pass into law.
Angel has a passion for all forms of writing, be it fiction or nonfiction. His curious nature gives him an ace up his sleeve when researching a new topic. Angel’s thirst for knowledge, paired with adaptability, always helps him find his way around.
