New York will fall short of the $500 million annual tax revenue target for the third year.

New York will fall short of the $500 million annual tax revenue target for the third year.

PlayNY has forecast that New York will “find it difficult” to attain its originally projected $500m in annual tax collection by 2024 due to its 51 percent tax rate. 

New York’s Dream of Mobile Sports Betting Hits a Roadblock

New York Casino Industry Falling Short

To reach this aim, PlayNY states that New York’s nine online casino operators will need to combine for $1bn in gross gaming revenue, a barrier that a US market has never reached over a single year.

Former Governor Andrew Cuomo‘s administration budgeted for proceeds from online gambling to reach $99m in FY 2022, $357m in FY 2023, and $500m by FY 2024.

Despite the projected difficulties, Eric Ramsey, data analyst for the PlayUSA, indicated the New York market will be “highly lucrative for the state” but will fall short by the market’s third year. He stated: “For New York to reach $500m in annual tax revenue, it will take a surge of demand that would be unmatched in US sports betting history.

Presuming those aforementioned nine operators will “hold” an average of around 7.5 per cent of all wagers, reaching the stated forecasts would need operators to handle more than $13bn in bets over the course of a year. 

Pennsylvania, a populous state that PlayUSA states now has the highest commercial tax rate in the US at 36 per cent, is the closest parallel among US markets. Pennsylvania’s 14 sports betting companies are on pace to collect more than $6bn in wagers this year. That will earn around $115m in state taxes. But even if New York falls short of its $500m goal, PlayNY argues sports betting will “almost probably generate much more” in tax revenue than any other state.

Quotes from the Story

“New York will be unique in its size and structure among US sports betting markets, so it would be irresponsible to declare it’s impossible. But attaining that target by year three is certainly excessively optimistic.”

“New York’s model might end up being the appropriate one for the state, even if it can’t be successfully replicated in most other places,” Ramsey noted.

“Bettors will have a range of sportsbooks to select from, encouraging a healthy market and competitive pricing. And given the attractiveness of the New York landscape, operators demonstrated themselves prepared to pay taxes at a rate generally reserved for much smaller monopolistic markets.

“There are tens of billions of wagering dollars ready to be caught in New York, but the question remains whether operators can capture enough to satisfy the budget forecasts. To attain those lofty ambitions, New York’s nine operators will have to deliver a competitive enough experience to compete with adjacent states, offshore sites, and neighbourhood bookies despite the hefty tax rate. Will it be enough? We shall see.”

About Lou De Aguila

Lou Aguila is a news and feature writer for Golden Casino News. For over a decade, Lou has published news and featured articles for some of the most reputable sports betting and online casino sites in the world, including BetNow.UK, VegasOdds, and BWin. Apart from being a hardcore live casino punter, he also covers sports stories in North American leagues from time to time.