Thursday, February 2, 2023
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Lawmakers to Review Sports Betting Revenue

'New York chose a big cut of a smaller pie than they could’ve had in sports betting... '

(The Center Square) – A New York state lawmaker will hold a hearing next week to learn how online sports betting has affected the state’s budget.

Assemblyman Gary Pretlow, D-Mount Vernon, announced the hearing would take place next Wednesday in Albany.

Mobile sports betting began in New York on Jan. 8. Nine operators received licenses through a competitive bidding process.

“As the first year of mobile sports wagering implementation comes to an end, the committee is interested in examining the overall economic impact that mobile sports wagering will have on the New York State Budget,” said Pretlow, who chairs the Assembly Standing Committee on Racing and Wagering.

Online sports betting has been highly successful in its first 11 months. According to data from the New York State Gaming Commission, the operators have taken more than $14.5 billion in wagers, and reported $1.2 billion in gross gaming revenues through the end of last month.

With a 51% tax on GGR, the state has received $620.8 million in tax revenue. Nearly all of that has been earmarked for education funding. That’s far ahead of what state officials forecasted for online sports betting.

For the 2022-23 fiscal year, which started on April 1, the state projected receiving $357 million in taxes. With four months left in the fiscal year, the state already has $457.2 million in its coffers.

Some operators have complained about the tax rate, which was set through the competitive bidding process. The solicitation required bidders to set the tax rate with stipulations that ensured the minimum levy would have been 50% of revenues.

The tax rate, one of the highest in the country, was a point of insistence by then-Gov. Andrew Cuomo. Cuomo had resisted legalizing mobile sports betting for years, but he became willing to allow it last year as the state faced large budget deficits due to the pandemic.

In an interview with Legal Sports Report last month, Caesars Entertainment CEO Tom Reeg, called the New York rate “ridiculous” when asked about what needed to be changed.

“New York chose a big cut of a smaller pie than they could’ve had in sports betting,” Reeg said. “They’ll have another bite at that with iGaming.”

Pretlow has also raised some concerns about the state of mobile sports betting. In March, both he and state Sen. Joseph Addabbo, D-Queens, called for reducing the tax rate, and increasing the number of operators.

Pretlow has also called for the inclusion of minorities in the sports betting process. One of the applicants that did not get approved last year, was sports retail giant Fanatics, which had partnered with entertainment mogul and entrepreneur Jay-Z in its bid.

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