by
New York lawmakers have to be thinking to themselves — “it’s good to be king.” If we’re talking about mobile betting tax revenues, then the state of New York is indeed king, and will remain king for the foreseeable future.
See, the New York State gaming commission just posted revenue figures for the week ending in May 26. They had a handle of $389.6 million on the weekend but $45.5 million of that is for its own gain. With that figure, New York has now exceeded more than $2 billion earned in revenue from mobile-betting operators (not the physical sportsbooks).
This number is significant for a number of reasons. For one, the state keeps 51 percent of that number as profit thanks to its tax rate on sports betting — operators, nine of which are licensed inside the Empire State, keep the remaining 49 percent. That means the state banked around $23 million this week off in-app New York sports wagering. Cushy, right?
Secondly, New York has a strong argument for being the country’s number-one sports betting market. The fact of the matter is, few states can claim their tax revenue figures have even sniffed the billion mark, little less two billy like the Empire State. This is all in two and a half years time as betting only became legal there in January 2022.
There are two chief reasons for this level of success. The first is New York is one of the most populous states in the country. The only states with more people are California, Florida, and Texas — and none of the three have legalized sports betting. That leaves New York as the state with the most possible sports bettors. Factor in the tourists the state brings in and its market size swells even more.
Secondly, and perhaps most importantly, that 51-recent tax rate is really something. No other state taxes sports betting to this degree. However, that could be changing. Other states have their eyes on the success of New York and are trying to duplicate it. This leads us to our next topic of discussion:
Illinois Following In New York’s Foot Steps
Illinois is on the cusp on raising its tax rate on sports betting. Toward the end of May, the Illinois Senate approved a new tax bill that includes wording around how it taxes sports gambling inside of its borders.
Right now, the populous state of Chicago has a flat tax rate of 15 percent — a very modest amount for its approved betting apps. Under this new rule, they would instead tax bookies in tiers. The more revenue they make, they higher the tax rate, of course. In the high end, bookmakers could receive a 40-percent tax.
That 40-percent number is still well under that of New York. However, it could be a sign of things to come. What’s to stop other hungry lawmakers from increasing its tax rate? After all, American politics is ripe with examples of lawmakers wanting more and more tax revenue.
That thought has certainly spooked investors of DraftKings and FanDuel. Both publicly-traded companies saw their stock prices shoot down when the news broke. The worry of “contagion” is certainly one to monitor.
If higher tax rates do spread, New York is the one to credit. They proved the model works with its 51-percent tax, which operators initially scoffed out and tried to talk out of. The Empire State called operators’ bluff and moved forward — to its massive benefit if tax revenue numbers are any indication.
Local Sports Provide Boom To New York Bettors And Lawmakers
So where’s all this in-state revenue coming from? Well, it’s from a litany of places, but it likely starts with the local sports scene. We all know New York is a diehard sports city, and that’s translated into better-than-most betting volume too.
Since we’re talking about May revenue figures, one of New York’s most-followed teams contributed to the big month — the Knicks. Yes, the Knicks are indeed back. They won their second NBA playoff series in two years, outlasting the 76ers in a six-game first-round matchup. Before these two years, the Knicks had exactly 0 playoff series wins since 2000.
If not for injuries, New York might’ve even made its first conference finals since the 1999-2000 campaign. The Knicks couldn’t stay healthy before bowing out to the Pacers in a seven-game series. They lost Game 7 at home by double digits AFTER its top player, Jalen Brunson, left the game with an injury.
Without the Knicks in the picture, all eyes are now on the Yankees and Mets. Those baseball clubs suck up all the Summer-time attention until the NFL season swings back around August (training camp opens) and September (the regular season begins). The Yankees are also “back” after a disappointing 2023 campaign. They own the best record in the MLB at this point. You can’t say the same about the Mets though, who are nine games below .500. The organization will likely be hitting the reset button after a failed championship rebuild that produced nothing of significance.
All this is to say, betting will only continue to dominate in the state of New York. Whether its local teams are good or not, the state just has too much going for it — a high tax rate and high population — for things to NOT stay the same. Let the money pile up!
