New York Senator Proposes Bill to Cut Tax Rate, Expand Sports Betting

New York Senator Proposes Bill to Cut Tax Rate, Expand Sports Betting

New York sports betting

Senator Addabbo has proposed legislation that, if passed, would cut the rate of taxation on online sports betting to 25% and increase the number of online sports betting operators by seven in New York.

Since almost a year ago, New York has allowed residents to participate in online sports betting legally. 

The economy is doing well, but some politicians are working to broaden the market even further, which would lead to a reduction in tax rates if it were successful.

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Increasing Sports Betting Venues

SB 1962 was proposed by Senator Joe Addabbo as legislation that, if enacted, would result in an increase in the total number of sportsbooks that have been granted licenses. Most notably, this would result in a general reduction in the tax rate that applies to online sports betting. Yesterday, Addabbo presented the measure to the Senate Committee for Racing, Gaming, and Wagering. The committee is currently reviewing the proposal.

Bringing Significant Modifications to Licensing Standards

According to the language of the proposed legislation, this would “amend the definition of sports wager to include other things of value.” Additionally, it would bring about significant modifications to the licensing standards that must be met by operators in order for them to be able to offer mobile betting products. Last but not least, it foresees the establishment of a number of brand-new sportsbooks as well as the modification of tax rates in accordance with the total number of operators.

According to the provisions of SB S1962, the New York State Gaming Commission is required to have fourteen licenses by the end of January 2024 and sixteen operators by the end of January 2025. In a nutshell, if the law is approved, the state of New York will grant licenses to operate seven different sportsbooks by the year 2025.

The New York state tax rate for online sports betting will drop to 35% as soon as the thirteenth license was handed out. Following that, tariffs would be reduced even further, to 25%, as soon as the fifteenth operator entered the market. In addition, the measure specifies that any new sportsbooks will be required to pay a licensing fee of $50 million.

The Currently Enforced Tax Structure Is Not Acceptable to Sportsbooks

At the time this article was written, the state of New York’s market for internet betting had nine licensees, all of which were being forced to pay extremely high taxes. The state of New York requires online sportsbooks to pay taxes amounting to 51% of their total earnings.

Major operators have been pretty unhappy with the way things are right now. BetMGM has threatened to cut back on its operations in the Empire State, and Tom Reeg, the CEO of Caesars Entertainment, has called the tax rate “crazy.”

Operators are now Contemplating Curtailing Their Operations within the State

The local economy has benefited quite a bit from the increased tax rate of 51%, despite the fact that business owners are unhappy about it. Taxes totaling $693 million were paid by operators of online sports betting in 2018, according to statistics from the relevant authorities. At first glance, this may seem like a good way to make money. However, high taxes may turn out to be a double-edged sword, as some operators are now thinking about leaving the state because of the high tax burden.

However, lawmakers might be reluctant to put the current profitability at risk because an earlier initiative, which was proposed by Gary Pretlow in March 2022 and failed to become law, was unsuccessful.

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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.