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February 1, 2023Colorado Lets the Good Times Roll With Record Revenue
February 1, 2023Executives from the two biggest mobile sportsbook operators in New York contended last week that the state’s high tax rate could have dire consequences for the nation’s No. 1 sports betting state if legislators don’t lower it soon.
DraftKings and FanDuel executives want New York to be the beacon of this industry and believe it can be. But they say the big early tax revenue numbers, not to mention the consumer safeguards expanded to New Yorkers, will prove to have been a fleeting achievement. Hence their belief that if New York does not change the course for the long term, there could be big problems.
DraftKings CEO Jason Robins went a step further, saying his sportsbook and others might soon offer New York bettors worse odds than neighboring states such as New Jersey. That is possible if legislators don’t act to lower the 51% tax rate on gross gaming revenue. That rate is tied with New Hampshire for the highest in the nation.
Robins compared the New York tax structure to that in France, where a high effective tax rate has impacted sportsbooks’ bottom lines and their ability to keep customers away from illegal offshore markets.
The discussion came at a joint legislative public hearing to review the first year of mobile sports betting in New York, hosted by state Sen. Joe Addabbo and Assemblyman J. Gary Pretlow. Both are leaders in the New York State government for the gambling industry.
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In the first calendar year of legal, regulated sports betting in New York, the nine licensed operators combined for nearly $16.2 billion in the handle and $1.36 billion in gross gaming revenue (GGR).
However, the state’s biggest quarter for sports betting in 2022 was the first, when New Yorkers made 30% of their yearly wagers. The fourth quarter accounted for 29% of the annual market share, bucking the trend in most states and prompting some industry observers to predict declining revenue in 2023 and beyond for the state, which netted more than $692 million in sports betting taxes in 2022.
David Isaacson, senior vice president of Spectrum Gaming, a gaming industry consulting firm, testified at the hearing that New York did stand out in the U.S. market and predicted the high taxes would drag down earnings in 2023 and beyond. He said other states saw large increases in the fourth quarter that jump-started stronger second years of legal sports betting.
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