Bill Would Freeze New York Sports Betting Tax Rate At 51%

New York mobile sports betting licensees agreed to a 51 percent tax rate to enter the Empire State market. Now at least one state lawmaker wants the operators to stick to their commitment. 

New York Assembly Racing and Wagering Committee Chair J. Gary Pretlow, D-Mt. Vernon, introduced a bill (A8658) on Jan. 10 to prohibit licensees from requesting a change to the tax rate on gross mobile sports gaming revenue. The rate would be frozen once the state of New York awards a contract. 

Details on whether or not an operator has requested a rate change remain murky. Response from Pretlow’s office on a request for comment made by Gaming Today is still pending. 

The legislation could impact all eight platforms selected as mobile sports wagering licensees on Nov. 8, 2021 by the New York State Gaming Commission (NYSGC). 

The eight platforms – which double as mobile operators, in most cases – will collectively operate nine online sportsbooks statewide, including New York’s first four live mobile sportsbooks which launched on Jan. 8.  Those four sportsbooks are DraftKings, Caesars, FanDuel, and BetRivers. 

Five operators are expected to get the greenlight imminently: BetMGM, Bally Bet, Points Bet, Resorts World, and WynnBet.

Pretlow And The New York Mobile Selection Process

Pretlow has expressed frustration with the state’s mobile sports betting selection process — and, according to some news sources, the 51 percent tax rate. 

The Albany Times Union reported Jan. 6, 2022 that Pretlow “predicted the rate might deter platform operators from bidding or from offering the kinds of business-building promotions seen in other states.”

It is an echo of comments Pretlow reportedly made to news sources like the New York Times, which described Pretlow as “upset that the selected companies seemed not to be as diverse or as numerous as they had hoped” in a Nov. 8, 2021 story.

Pretlow reportedly commented the NYT around the time the NYSGC was honing the “tax rate matrix” that resulted in the 51 percent tax rate. 

“I’m truly disappointed that the Gaming Commission is making a serious error in not being inclusive, and just going back to the good old boy systems,”  the NYT story quotes Pretlow as saying.  “We’re just playing around with the same people.”

Pretlow has also expressed concern with the selection process on Twitter — specifically, in an Oct. 21, 2021 tweet saying “all applicants” for the New York mobile market should be allowed to compete.

While the former Governor had a very limited vision for how a sports betting market could operate in New York, we now have the opportunity to get this right. We should license all applicants and allow them to compete for the business of New Yorkers.

— J Gary Pretlow (@JGPretlow) October 21, 2021

What Could Be Next For New York Mobile Sportsbooks?

Pretlow’s proposal may impact only the eight licensed platforms. No other mobile sports betting bids will be accepted, at least for now, says the NYSGC, and Pretlow’s bill would keep the 51% tax rate firm.

The regulatory agency said in a June 2021 mobile sports wagering FAQ document that no future operators will be authorized “under the Commission’s interpretation of present law.” It’s uncertain, however, if state lawmakers like Pretlow feel the same. 

For now, the legislation is awaiting a hearing by the New York State Assembly Racing and Wagering Committee. The committee is vetting bills up for consideration during the 2022 regular session of the New York State Legislature. The legislature meets until early June. 

Also read: What 51% Tax Rate Means For New York Bettors