The Empire State has recently created history by becoming the first state in the US to record $1 Billion in sports betting tax revenues. While legal sports betting only came into effect in New York on January 8, 2022, the state managed to create $1.005 billion in sports betting tax revenues as of May 31, 2023.
Much of this is derived from the fact that, with a population of over 20 million, New York is the most populous state in the US to have legalized sports betting. However, it’s also true that the severe 51% tax rate on online sports betting has helped push tax revenues through the ceiling.
While this has helped New York state fund a variety of educational programs, many of the state’s legal sportsbooks have complained that the high tax rate has hindered their profitability.
New York has already enjoyed $22.9 billion in the amount of online sports bets taken since its launch in January 2022. This has helped to bring in $1.97 billion in gross betting revenues into the Empire State as of May 2023.
The tax revenues created by New York sports betting are over twice that of its nearest rival. Pennsylvania has only recorded $427.6 million in tax revenues despite sports betting being legal in the Keystone State for longer. Following behind, New Jersey has recorded $368.4 million in tax revenues, followed by Illinois and Tennessee with $289 million and $141.6 million respectively.
So which sportsbooks are helping New York create these record revenues? With over 43% of all bets in New York being taken by FanDuel, this sportsbook has enjoyed over $1 billion in gross gaming revenue which will have significantly boosted the state coffers. Close behind is DraftKings who enjoys a 31% share of the sports betting handle.
What next for sports betting in the Empire State?
Now that the tax revenues have been recorded, it’s up to legislators to decide how to capitalize on the success of legal sports betting in New York. Already plans are in plans to widen the range of bets that can be made to include things like wagering on awards such as MVP. There is also a hope that New York State could increase the ability to bet on horse racing in the online domain.
However, the most interesting question is whether New York could legalise online casino gaming? The success of legal sports betting in New York has meant that many are now suggesting that the Empire State could be the next state to legalise online casino gaming.
To do this would require a fair amount of negotiation with the state’s Hotel and Gaming Trades Council. But with plenty of momentum gained from the impressive tax revenues, it’s expected that there will be a concerted push for legal online casino gaming at the next legislative session. All of this shows that New York could soon become the epicenter of all online gambling in the US.
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