New York Sports betting tax revenue from online betting dwarfs the same in other states. However, this does not eclipse the actual revenues and expenditures of the state. If anything, New York’s overall tax status makes sports betting tax haul miniscule.
New York has already broken the record of sports betting tax revenue a year from now, with most of 2022 still to play. However, it will have to grow exponentially over the last few months to really reduce the state’s funding needs.
New York Sports Betting Tax Exceeds Expectations
In less than six months, sports betting has produced $267 million tax revenue for New York. The vast majority of this, $263 million to be exact, comes from online betting. That’s a record amount for any state in slightly more Five months.
It’s also already gravy for 2022, with most of the state’s fiscal year still ahead of it. For the first year of legal online bettingthe new york budget valued he would receive $249 million. Thus, it has already exceeded that expectation.
As legislative attempts to lowering the revenue share from 51%, a national high that online sports betting operators pay to the state have failed this yearNew York could see the highest sports betting tax on record for a year by 2022.
There is no doubt that the state has so far achieved its goal of making as much revenue as possible from online sports betting. It’s important for New York residents to understand just how important this income is overall.
Putting New York’s Revenue in Context
New York’s total spending for fiscal year 2022-23 is $220 billion. Thus, the amount of sports betting tax the state has collected so far would cover less than two percent of these costs.
At this point, the tax revenues from sports betting would not be sufficient to cover a large part of the expenditure by item. These include:
- 4.5 billion dollars for the state Housing capital plan
- $1.6 billion in grants for “health transformation capital”
- $800 million for the Emergency Rental Assistance Program
- $500 million for electric school buses
As already noted, however, the year is not over. Funding from this source still has time to grow. It is likely to do so by a significant margin. This year will again see the debut of the College Football 2022 and nfl seasons.
It is difficult to predict exactly how much new revenue these events might bring. Indeed, the percentage of revenue sharing could act as both a strength and a weakness of the New York system.
The downside of New York’s 51% rate
The current revenue sharing arrangement means that the state gets the largest share of all sports betting. At the same time, it could limit the amount of this gain for sports betting.
New York online sports betting all argue that they are currently operating at a loss under current conditions. Some of them have already cut other expenses they can control to account for the high tax rate.
For reference, neighboring New Jersey only rates a 13% rate on income online sports betting. One of the major expenses that New York sportsbooks have cut spending on is advertising.
Including buy less ad space. This also includes reducing the frequency and value of promotions to entice new customers to sign up. While that may speed up those efforts to some degree when the football season returns, the question is by how much.
The problem is simple math. 51% of a smaller pot could actually turn out to be less than 35%, for example, of a much larger pot. Without frequent and lucrative promotions this fall, that might be the case.
New York’s ability to rely on sports betting taxes appears solid. He simply shouldn’t rely on them to be a significant source of income in the context of his overall budget. It is unlikely to enter this stratosphere.