A third attempt to allow more sportsbooks and lower gambling taxes is slowly passing through New York’s Senate.
The proposals would significantly change the landscape in the biggest - and still growing - state for sports betting in the US.
If passed, Assemblywoman Carrie Woerner’s A6013 bill would allow for seven new sports betting licenses by 2026 to add to the existing nine legal sportsbooks in New York State. Woerner is the newly appointed chair of the Assembly Racing and Wagering Committee.
A similar bill was introduced in 2023 but was not passed. There was also another attempt in 2021, a year before sports betting activity was legalized in the Empire State.
The expansion would be phased, with five more sportsbooks operating by January 31 next year, with the rest to be live by the same date in 2027.
In addition, the current 51% tax rate that sportsbooks are required to pay into state coffers would be almost halved. That alteration would also be staggered.
If 10 to 12 NY sportsbooks are on stream, the tax rate will fall to 50%. It would then reduce further to 35% when there are 13 or 14, and to 25% when the maximum quota of 16 is reached.
New York has the highest betting tax rate in the nation, and it’s been a hotly debated topic since mobile sports wagering was legalized in 2022.
Some operators have continued to object. However, when the new bill was first introduced. Carrie Woerner said no sportsbooks had raised the topic recently. DraftKings was one notable example for u-turning last summer on a plan to apply a surcharge to winning bets in New York to mitigate the tax paid.
Also, with other states noting the runaway success of sports betting in New York and the revenues raised - almost a billion dollars in 2024 went to education - lawmakers elsewhere have been seeking ways to raise their rates to nearer New York levels.
New Jersey Gov. Phil Murphy recently proposed almost doubling the NJ tax rate from 13% to 25%. Similar moves are at various stages in Louisiana, Ohio, and Illinois.
Whether more sportsbooks operating in New York will offset a tax rate reduction remains to be seen. Most of the biggest sportsbook operators are already present in the Empire State.
The notable exceptions are perhaps Bet365 and Borgata. The former is live in 11 US jurisdictions but was unsuccessful at securing a license in 2022. The latter operates in New York’s neighbours New Jersey and Pennsylvania.
Licenses would operate on a rolling basis too. At the moment, the available slots are strictly limited to nine, effectively closing the market to potential fresh competition. Any providers who are initially unsuccessful could continue to apply until the maximum number is reached.
It may be that New York legislators have been casting gazes across the Hudson, where NJ has 13 legal sportsbooks. It may even somewhat thwart dollars lost to offshore betting apps.
Estimates in 2024 suggested illegal betting activity could be resulting in more than $5 billion lost in tax to New York State, which has a significant structural budget deficit.
Also, across the other side of the house, Sen. Joe Addabbo continues to lead on a bill to legalize online casinos in New York. A successful passage would, in his words, provide a more “sustainable” revenue source from gambling.
Though there are indications the legalization of online casinos will be looked at by the Assembly in this session, progress on that front is likely to move at a slower pace because of the complexities involved.
