Poker rate

Does New York’s Online Sportsbook Need Legal iCasino and Poker to Survive?

Online sports betting operators New York desperately need legal online casinos and poker to stay afloat in the state. Executives at several New York online sportsbooks have criticized the state’s 51% tax rate, which makes it a tall order to build a long-term sustainable business.

“I think the sooner New York gets up and running the better because existing sports betting operators in New York are dying on a vine. It’s just not sustainable at this tax rate,” said a New Jersey-based gambling lobbyist. Bill Pascrell III of Princeton Public Affairs Group Told PlayNY.

“And without being able to supplement it with a bit of iCasino and poker.”

Lawmakers attempted to legalize New York online casinos, online poker

Senator Joe Addabbopresident of the Senate Committee on Racing, Gaming and Betting, introduced legislation to include online casino games and poker late in the session to start the conversation. Addabbo, who is running for re-election in District 15, hopes to make New York’s online casino games and online poker the star gaming item in next year’s state budget.

Addabbo’s iCasino bill included a 25% tax rate with a promotional gaming franchise. The bill provided that New York would receive an estimate $475 million annually in tax revenue. More $150 million in one-time license fees from casinos, operators, and independent contracts seeking to do business in the state.

Game industry leader Chris Krafcikyet, I thought these numbers would change.

Reply via Twitter to a brad allen report of Legal sports reportKrafcik wrote:

“IMO, NY OSB operators are getting OSB tax reform (likely in the form of capped promotional deductions) as part of a future NY iGaming legislative package in which some of these same operators (e.g., BetRivers) accept around 50-55% tax on iGaming slot revenue + big upfront license fee.

Sports betting in New York boomed, but tax rate crushed operators

Legal online sports betting has generated a record $276 million in the tax file for New York from the launch of January 8 to June 5. Lobbying and legislative efforts to secure a tax cut via carrier expansion were defeated in the NYS legislative session.

New York’s online sportsbook – many of which have spent heavily on marketing and promotion in order to gain significant market share – have so far not released their exact losses. However, many posted overall losses in their quarterly earnings calls, respectively.

Until June 5, New York Sportsbook published $7.7 billion in handle. This lead to $541.2 million in total gross gaming revenue – 51% of which goes to the state.

With NY surpassing $1 billion under management in each of the first five months since launch, New York has no incentive to make short-term tax rate changes. And after a slump over the summer, business is expected to pick up again in the fall once the NFL season begins.

An invoice of Assembl. Gary Pretlowwhich did not pass, had called on the Empire State to drop from nine New York sportsbooks to no less than 14 by January 31, 2023 (which would lower the tax rate from 51% to 35 %) and no less than 16 by January 31, 2024 (which would reduce the tax rate from 35% to 25%).

Addabbo said lawmakers will revisit a myriad of online sports betting topics in New York later this fall.