As the state’s Senate prepares its comprehensive budget bill, it is apparent New York sports betting is vital to growing state revenue. And lawmakers signaled that they plan for more mobile sportsbook options than the current nine.
Under the Senate’s budget proposal, an additional seven mobile sportsbook operators may join the betting market by the start of 2024. New Yorkers would then have up to 16 options for placing a wager from their phone.
New York Sports Betting Off to Wildly Successful Start
As the state Senate gathers to debate legislative priorities and how to pay for them, lawmakers have been given a significant boost from mobile New York sports betting. Last year, the state coffers were boosted by over $200 million in licensing and application fees from the nine platforms currently allowed under gambling regulations. Additionally, month sportsbook handles have eclipsed previous records in other states, contributing over $50 million per month in tax revenue.
Adding other sportsbook platform providers would create additional opportunities to cash in on licensing fees. Whether the state’s total handle would continue its upward trajectory is less clear. The mega-sportsbooks that were available when New York launched mobile sports betting have consolidated significant market share. The three prominent early movers are:
Whether other, newly launched sportsbooks could either grow the entire betting pie or steal any part of the current pie from these behemoths is questionable. As of January, the three books combined for 91% of the mobile betting market share in New York.
New York Sportsbook Tax Rate Would Not Drop
Earlier proposals for additional sportsbooks in New York tied new competitors to a lower tax rate. Since mobile New York betting went live on Saturday January 8, 2022, all participants are paying 51% of their gross wagering revenue to the state. And it appears Senators dropped proposals to lower the significant tax rate.
As updated, Senate Bill 8009 maintains the 51% tax rate even if new licenses are granted. State Senator Joe Addabbo Jr. attempted to tie new entrants to lower grates, with a graduated step-down plan. Under his now dormant plan, five new sportsbooks would be licensed in time for a January 2023 launch. Once active, all mobile sportsbook operators would pay a 35% tax rate. Then, by January 2024, two more sportsbooks would be allowed to enter the market. At that point, the tax rate would fall to 25% permanently.
However, other New York lawmakers liked his play for more revenue from sportsbooks without granting the companies lower rates. It is not known whether any of the sportsbook operators who were conspicuously shut out of the original licensing process would be willing to now join the market.
New York has proven to be a massive mobile sportsbook market. Whether that market can support additional entries paying eye-watering fees and taxes remains to be seen.
