Published on: January 15, 2023, 01:58 am.
Last updated: January 15, 2023, 01:58.
The results are in, and New York was definitely the big winner in the first year of online sports betting in the state.
A statement from Gov. Kathy Hochul’s office reported Friday that the state collected more than $709 million in tax revenue from online sports betting, which launched on Jan. 8, 2022. The figure rises by another $200 million after you factor in consider the license fees, which were $25 million for a 10-year license.
These revenue figures are the most of any state for a year of operations. With nearly 20 million residents, New York is the largest US state that offers online sports betting.
In just one year, New York has become a national leader in providing responsible entertainment to millions while bringing in record revenues for education, youth sports and problem gambling prevention,” Hochul said in a statement.
As of January 7, the state’s licensed operators had accepted nearly $16.6 billion in bets. The bookmakers claimed nearly $1.4 billion in revenue, and the state taxes that revenue at 51 percent.
The vast majority of tax revenues will benefit the state’s education system. The state also allocates $5 million each fiscal year to cover athletic programs for disadvantaged youth. It also allocates $6 million each fiscal year to problem gambling services.
“The additional revenue generated will help ensure we have a robust system of programs and services to meet the needs of individuals, families and communities across the state,” said Chinazo Cunningham, commissioner of the New York State Office of Addiction Services. and Supports.
NY sports betting by the numbers
According to GeoComply data, nearly 3.8 million unique accounts were created in the state in the past year. More than half were created in the first two months of last year. Almost 1.7 million accounts were created last January and more than 550,000 in February.
While some New Yorkers opened accounts with multiple operators, the 3.8 million accounts represent more than 28 percent of the state’s gambling-age population (21 and older). There are 13.5 million adults 21 and older across the state.
By far the most popular event was the Super Bowl. GeoComply found that nearly 700,000 accounts were active before and during the NFL’s big game. The next most popular championship event was last month’s FIFA World Cup final, with 262,000 active accounts. The NCAA Men’s Basketball Championship game drew nearly 200,000 accounts in the state.
The $709 million in tax revenue from online sports betting far exceeds what the state budget forecast from the gambling market after lawmakers included online sports betting in the budget bill nearly two years ago.
New York’s fiscal years run from April to March, and for the 22-23 fiscal year, which ends March 31, the state originally projected $357 million in tax revenue. Tax revenues for the fiscal year already exceed $546 million. And there are two and a half months left in the fiscal year.
The 51% tax cut may prove difficult
Sports bettors have long complained about New York’s tax rate, a product of the deal by then-Gov. Andrew Cuomo insisted that when state lawmakers proposed legalizing online betting. Cuomo resigned from office just weeks after the state launched the license application.
Although revenues have far exceeded initial expectations, don’t expect the state to be willing to lower the rate. New York officials still expect budget shortfalls in the coming years. For fiscal year 24-25, budget forecasters expect it to be closer to $3.5 billion. It’s almost $6 billion in 26-27.
Since sports betting taxes fund education, some lawmakers will have to accept any rate reduction. This is especially true if the state fails to find other new sources of revenue to make up the expected shortfalls.
What might need to happen is a discussion about legalizing iGaming or mobile casinos in the state. Mobile casinos will very likely generate more revenue than sports betting. That means operators and state officials may be able to find a solution that allows New York to generate critical funds for education while improving the profitability of gambling operators.
The New York State Legislature just started its 2023 session. We should soon see if there is any desire to include more gaming options after lawmakers approved online sports betting and upstate casinos the past two years.