Every company that put in for a license to operate a mobile sportsbook in the state of New York knew there was going to be a heavy price to pay. The state set the tax rate on all revenue generated by the books at 51%. Still, no one balked. The population in the state made it appealing enough to still do business there.
Less than two months into legalized mobile betting, some state lawmakers want to ease that tax burden. State Senator Joe Addabbo Jr. and Assembly Member Gary Pretlow have introduced a bill that could slash the tax rate to just 25%.
While New York has set records for the amount of money bet in a very short window, the sportsbooks are not making money. Between the high tax rate and a flurry of promotional offers to entice new customers, these companies are spending far more than they are bringing in right now.
The bill introduced by Addabbo and Pretlow would gradually lower the rate as more sportsbooks begin operating in New York. If just one more came online, the tax rate would fall to 35%. It would fall to 25% if at least 15 mobile sports books were operating in the state. The bill would also make those promotional efforts, such as free wagers, tax free.
