New York launched its online sports betting market just over a year ago. Despite being in its infancy, the market quickly became the largest and most powerful of all American states with legal sports betting.
New York made $909 million in revenue last year through its 51% tax rate on gaming revenues. Addabbo’s proposed tax reduction could prove to be a sticking point, given the massive amounts of money already at play.
That is why Addabbo is planning on being flexible. He believes that by introducing the bill, he is starting a conversation that needs to be had.
“It’s a starting point for negotiations in this brand new legislative session on the cusp of the state budget,” Addabbo said during a Tuesday interview.
All nine of New York’s online sports betting operators, including giants like FanDuel and DraftKings, are held to the 51% tax standard. Caesars CEO Tom Reeg said last November the rate was “ridiculous,” a sentiment other high-ranking officials at New York’s sportsbooks share.
Pretlow attempted to address the tax rate with the bill he proposed last year but did not make any progress.
“I thought [the tax rate] was exorbitant,” Pretlow said in December. “But the operators are doing it, so I’m not going to take from education for them to make more money. So I’m pretty sure it will [stay].”
All online sportsbooks agreed to the tax rate when they submitted their license applications, which makes the retroactive negativity less impactful. Still, these operators could be saved by the new legislation if it passes.