New York Operators Could Be Forced to Pay Over 60% in Tax

The road to regulated New York mobile sports betting is moving along nicely, but the price for operators could be far from cheap. 

Operators looking to offer the vertical were given an August deadline to hand in their applications and were given points-based incentives to propose higher tax rates. 

How is the New York mobile sports betting scene panning out? 

At the time of writing, 14 sportsbooks have submitted applications to operate in the potentially lucrative New York sports betting market. FanDuel and DraftKings, two of the big hitters in the US, are among those to add their names into the mix. 

Operators who proposed a tax rate of 50% were given 20 points on their applications. In comparison, that figure dropped to three for suggestions between 12.5% and 30%. 

The length of a licence was also determined by suggested tax percentages:

  • 12.5-30%: Three years
  • 30-50%: Five years
  • 50%+: 10 years 

Tax rates will depend on how many operators the state chooses to grant permits for. If this number is four or five, the 64% bracket will stand. 10-12 operators will result in a 50% tax rate, and 13 or more will equal 35%. 

The pressure is on for operators looking to receive a licence, though. Regardless of what the tax rate ends up being, operators must agree to it or face not receiving a permit. 

New York not the most budget-friendly market for operators 

The likely significant tax rates aren’t the only ramifications for mobile sportsbooks in the state. It’s expected that applicants will need to pay $25 million to apply for a licence, suggesting that New York is trying to avoid creating a saturated market. 

In addition to the application fee, operators would also have to hand over $5 million annually to the land-based casino that they base their servers in.

The long road to mobile sports betting in New York 

Ever since the repeal of the 1992 Professional and Amateur Sports Protection Act (PASPA) in 2018, experts have talked about the significant potential that New York has for sports betting. But while the vertical is regulated in a selection of upstate casinos, online regulation has been much more difficult. 

Time and time again, proposals have been knocked back. In that period, many punters living in New York City and surrounding areas headed over to New Jersey — where mobile sports wagering is regulated — to place their money. This has helped the Garden State become one of the US’ most prosperous sports betting markets. 

It seems like the COVID-19 pandemic changed the mind of State Governor Andrew Cuomo, who repeatedly opposed the vertical in the past. With a growing state budget that could rise to $15 billion, mobile sports betting was included in the 2022 fiscal year budget. Up to 25 operators could obtain a licence in the Empire State under official regulations. 

After a lengthy battle, it’s expected that mobile sports wagering will go live sometime next year.