30.5 percent tax rate proposed for New York iGaming as bill put forward
Sen. Joe Addabbo has filed Bill S4856 seeking to legalize online casino in New York. Most notably, the tax rate proposed by Addabbo sits at 30.5% which is comfortably lower than the 51% tax on sports betting GGR.
The bill uses the state’s online sports betting legalization as an example of the benefits to the state. It reads: “This year, in its first month of operation, New York quickly became the leading mobile sports betting market in the nation, generating nearly $70 million in tax revenue in a single month. Similarly, if authorized, New York would quickly become the national leader in online casino
gaming, generating hundreds of millions of dollars in tax revenue annually for the State as it continues to recover from the economic downturn caused by the COVID-19 pandemic.”
What are the New York iGaming fiscal predictions?
The fiscal predictions from Sen Addabbo are:
- New York State to receive approximately $475 million annually in tax revenue, based on ‘conservative’ market estimates
- New York State to receive $150 million in onetime license fees from casinos, operators and contractors seeking to conduct online interactive casino gaming
The bill also makes clear that all licensed sports betting companies will automatically be entitled to an online gaming license. Complaints from commercial operators regarding the sports betting tax rate have not had much traction, so legalized iGaming at a lower tax rate would go some way to appease the corporate giants.
New York is the fourth most populated state in the US, behind California, Texas and Florida. Given the Senator’s tax prediction, conservative market estimates would place the New York iGaming market at approximately $1.6 billion adjusted gross revenue per year. Given NY’s proximity to New Jersey, it’s assumed many bettors simply hop across the Hudson and wager in NJ.
Commercial operators continue to show interest in legalized online casino in Texas and sports betting in Florida. Last year Proposition 26 and 27 failed to legalize sports betting in CA, being heavily defeated at the ballot. The next available opportunity for California to legalize will be 2024.
On the business to business side, live dealer games ‘shall not be required to be located within the premises of a gaming facility, as defined in subdivision twenty-three of section thirteen hundred one of this chapter, but must be located in the state of New York.’ This will undoubtedly impact the main suppliers of live casino as none are currently based in New York.
As is now commonplace, there is a significant section dedicated to responsible gambling. Each website and/or phone application must maintain a publicly accessible internet page dedicated to responsible play, outlining the policy and providing a toll-free number directing callers to reputable resources containing responsible gambling information which must be free of charge. It also requires each licensee to submit an annual responsible gaming plan to the New York State Gaming Commission.
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