The tax rate applicable to the sports betting industry, and most specifically, to mobile sports betting services, has been one of the most discussed topics in the state of New York since the beginning of the year. Now, a group of state lawmakers is trying to improve the numbers and make the situation easier for the sports betting sector by adding some new operating license holders and reducing tax rates, as part of their belief that the highly-competitive market would come up with even stronger results.
The adjustment of the sports betting tax rate has been a hot-topic button since the new form of gambling became officially available to local residents.
Under the proposed measures, any newcomers to the state’s sports betting industry would probably have to face a hefty bill as soon as they set foot in New York state. Despite these requirements, Joseph Addabbo, chairman of the Senate Racing, Gaming and Wagering Committee, filed SB471 – a new piece of legislation on March 4th – aimed at supporting a legal move of Gary Pretlow, chairman of the Assembly Racing and Wagering Committee, to amend his A8658A bill.
Gary Pretlow and Joseph Addabbo are known as the two most eager proponents of New York’s gambling industry. For almost a decade, the two of them have tried to bring casino gambling and sports betting to the state. After succeeding in doing that, they are now trying to make amendments to the applicable legislation in order to guarantee the best conditions possible for both businesses and customers.
Sports Betting Proponents Seek to Bring Changes to Sports Betting Licensing Fees and Tax Rates
The two aforementioned bills – A8658A and SB471 – are aimed at reducing the tax rate applicable to the sports betting sector from the current 51% to 35%. The move should come with a condition by which 14 companies offer their services in the state. According to analysts, this condition could be met by the end of January 2023. The pieces of legislation also propose the tax rate to be cut to 25% if there are 15 sports betting operators in New York state.
Under the two proposals, the maximum number of sports betting license holders will be 16, with the implementation schedule set for January 31st, 2024.
The A8658A and SB471 bills include some changes to the licensing fees. Currently, sports betting operators in the state need to agree to a 51% tax rate in order to be given the opportunity to offer their services in New York. They are also supposed to pay $25 million to acquire a 10-year operating license.
This will change if the new bill proposals are turned into law. Under the two pieces of legislation, the entry fee will increase to $50 million but at the same time, the tax rate applicable to sports betting services is set to be reduced. For the time being, it remains unclear whether the $50-million fees would apply only to newcomers or would also apply to the companies that already offer their services in New York’s sports betting sector.
Apart from that, the state of New York may also have to take into consideration the potential addition of online gambling to the offer. Another bill, called SB8412, was unveiled by Mr. Addabbo last week to suggest the addition of online gambling services to the legal gambling market of the state.