BetMGM Cautions About New York Operations Due to Irrational Taxes

BetMGM Cautions About New York Operations Due to Irrational Taxes

BetMGM, the exclusive sports betting partner for MGM Resorts, recently had an investor day during which it disclosed its objectives for generating net revenues of $1.3 billion in 2022 and estimated a loss of $430 million in earnings before interest, tax, depreciation, and amortization.

Soon after that, the corporation announced that it wanted to be more careful about its presence in the New York sports betting market until some modifications were made to the “irrational” taxes that are now in place in that state.

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BetMGM Is Trying to Exercise Greater Caution

Gary Deutsch, the chief financial officer of the corporation, stated that the company will maintain its cautious approach to its activities in the state of New York until the “irrational” taxes that are imposed here drop dramatically. At this time, the state levies a tax of 51% on the revenue generated by gambling establishments.

Nevertheless, the same rate is applied to the revenue that is created via promotional credits. In other words, the state’s real net revenue tax on gaming surpasses the milestone of 100 percent for the first time. Deutsch went on to say that the corporation simply does not have the financial resources to continue putting its money into “irrational projects.”

He went on to explain that although players would not be able to continue playing with a house that was consistently winning, the same was true for the house, which could not continue playing when there was an obvious possibility of losing. The corporation, on the other hand, is hoping that in the not too distant future, the tax climate would be more beneficial.

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Tax Contagion in New York Sports Betting Market?

Not according to Adam Greenblatt, the chief executive officer of BetMGM, who indicated that it is less likely for even more states to adopt the same kind of taxes as are applied in New York. He bolstered his point of view by referencing the implementation of new frameworks in the states of Kansas and Ohio.

Greenblatt also believes that the increased longevity of these tax schemes will one day result in better engagement rates for players operating in regulated marketplaces. In the end, this will be to the advantage of everyone involved.

BetMGM has decided to stop concentrating all of its financial resources on the New York market and instead begin making investments in other states. The company’s overall growth plan makes heavy use of this tactic, which involves basing decisions about where to invest more money on the success of previous investments.

BetMGM is able to compete with its rivals, many of which are currently engaged in increasing their financial investments in their marketing strategies, thanks to this strategy. When compared to the company’s primary rivals, this business’s current marketing budget is significantly lower by the hundreds of millions of dollars.

MGM Resorts made an offer to purchase LeoVegas, an online casino operator, at the beginning of this month for a price of 607 million dollars. With this move, the company is moving forward with its plans to expand its presence on the European continent. A few days later, BetMGM made the announcement that it had reached an agreement with the Houston Astros to form its very first professional sports partnership in the state of Texas.


About Lou De Aguila

Lou Ramon Aguila is a contributor for Golden Casino News. He has a degree in BSBA Legal Management with great interest in high-profile legal cases involving sports personalities. An ultimate sports junkie, he covers just about everything in the sporting world with an emphasis on the NBA, NFL, and MLB. In his past time, Lou loves to read manga, watch anime and critique pro-wrestling matches.