If you’re interested in sports betting in New York, you’ve come to the right place. We’ve outlined some of the most important things you’ll need to know to make the most of your betting experience.
Online sports betting is a boon to the Empire State’s economy
Sports betting has never been safer or more exciting. Thanks to the passing of a law in New York in April of 2021, the Empire State has become the 18th state to legalize online sports betting. This is the first time that millions of people will be able to wager on games without breaking the law.
New York State has been working to expand its sports betting market for many years. The state has also been trying to find a more sustainable model for its sports betting industry. However, Governor Kathy Hochul has yet to sign any changes to the state’s online sports betting law.
Legal sports betting is estimated to create up to a dozen new jobs for every 100 wagers. According to the American Gaming Association (AGA), legal sports betting could bring in as much as $5.3 billion in revenue to the state each year.
AGA also estimates that the sports betting industry could generate more than 150,000 new jobs. As well, the industry could bring in as much as $25 billion in revenue each year. In addition to bringing money into the economy, the industry would help racetracks, casinos, and websites that offer wagering.
While the sports betting industry has been growing in other states, New York has been the first to offer legal online wagering. Previously, fans could only bet on games in nearby states.
When the United States Supreme Court overturned PASPA in May of 2018, allowing states to legalize sports betting, the state was poised for a big win. Four operators launched the first sports betting apps in the state on January 8 of 2022. Of course, this was just the beginning of the sports betting industry’s success.
In just five months, the state generated $267 million in tax revenues from mobile sports betting. These tax revenues represented a huge boost to the state’s economy.
With the passage of a new bill in the New York State Assembly, the number of active online sportsbooks in the state will rise from nine to sixteen by 2024. In addition, the tax rate for online sportsbooks will decrease from 51% to 25%.
Mobile sports betting has been a bumpier road
Mobile sports betting in New York is a relatively new proposition. The state first rolled out legal in-person sports betting in 2013, but the mobile craze has been a bit bumpier road to travel. Despite this, there are already some operators in the Big Apple.
While a number of states have been racing to develop regulation for online sports betting, New York has come up with a unique way to license operators. Rather than trying to put together an overarching state-wide licensing scheme, the New York Gaming Commission has opted to license nine operators.
Among the other companies awarded the nod are FanDuel, Caesars Sportsbook, and WynnBET. FanDuel’s sportsbook is currently located at the Meadowlands, eight miles from Manhattan. Meanwhile, the company’s aforementioned DFS platform has already made an impression on New Yorkers.
The state has also had to work out some key regulatory details, including a tax rate that’s the highest of any state in the country. And while the state’s tax rate is a boon to residents, it makes it nearly impossible for online sportsbooks to make a profit. This is not to say that the industry will never return to the Empire State. But given the current landscape, it will be interesting to see what the future holds for the state.
The state has even gone a step further and allowed the purchase of lottery tickets through a smartphone app, Jackpocket. Considering the popularity of these technologies, this may be the first step towards a larger, more sustainable model for mobile sports betting.
For the state to actually put sports wagering on the public’s radar, it has to be able to prove the worth of its offerings. It’s hard to do that without an effective regulatory framework in place. In September, New Jersey reported that it had earned over a billion dollars from sports betting in just three months. Assuming that the state’s current slew of operators can deliver, the future is bright.
Aside from the fact that New York is the home of the NBA’s Brooklyn Nets and the NFL’s Buffalo Bills, there’s no denying that the state has a burgeoning gambling market. If additional licenses become available, the next few years will be interesting to watch.
Daily fantasy sports sites were banned in New York in 2013
New York Attorney General Eric Schneiderman has ordered daily fantasy sports sites to cease operating in the state. The New York Attorney General’s office issued a cease and desist letter to DFS operators, claiming that their games are illegal gambling. This ruling will likely affect hundreds of thousands of New Yorkers.
Daily fantasy sports are games in which players create teams of athletes to compete against each other. In a contest, the player must use their knowledge to predict the performance of their team. At the end of the contest, they collect the winnings.
Daily fantasy sports are a relatively new phenomenon, but it is growing rapidly. Its revenue is estimated to exceed $300 million annually. However, there are concerns about whether the game is legal. Despite its popularity, the game has generated negative attention from social conservatives and politicians.
FanDuel, which is based in New York, and DraftKings, a company based in Boston, are the leading players in the daily fantasy industry. Both companies have been funded by venture capital firms and leagues. They are partnered with NFL and Major League Baseball teams.
FanDuel’s revenue was estimated to be over $1 billion in September. It has also been criticized for its aggressive marketing. But both DraftKings and FanDuel argue that their games are not gambling.
DraftKings, however, says that their games are indeed skill games. And it’s been a good business model for them. Since they were launched, they have raised more than a hundred million dollars from investors.
FanDuel and DraftKings sued the New York Attorney General, accusing him of abusing his authority and defying the law. The two sides settled, agreeing to better disclose their terms of service.
Until now, daily fantasy sports has been considered to be illegal gambling in the state. However, the law may soon change. If a more liberal attitude towards gambling is adopted by Washington lawmakers, the state may revisit its gambling tax.
A court ruling determining that daily fantasy sports is not illegal gambling is just the latest in a long string of legal battles involving the industry. Its status could quickly change in many states.
Tax rate on sports betting is the highest in the U.S.
Most states tax the income of sports bettors and sportsbooks. These taxes can range from 5% to 20%, and the amount of tax depends on a variety of factors. The federal government sees gambling winnings as income, so they also levy taxes on the winnings of sports bettors. However, some states require sportsbooks to pay state taxes, while others allow for promotional deductions.
Sports betting revenue is typically spread across multiple fronts, but some states use the funds for mental health initiatives or youth sports programs. Other states earmark most of the sports betting tax dollars for one purpose, such as helping to fund colleges.
New York’s mobile sports betting laws forced gambling operators to watch their marketing and advertising spending. This has eaten up taxable revenues, and operators have already begun cutting back on promotional bets.
In New York, sportsbooks must pay 8.5% on retail revenue, and 13% on online wagering profits. They can deduct promotional credits and bonuses. Pennsylvania’s sports betting taxes are far lower, but the state still collects more than a third of all its gambling revenue.
Ohio has approved a 10% tax on sports betting. It will go to the Sports Gaming Revenue Fund, which will benefit local schools. Since sports betting is legal in more than a dozen states, operators need to be aware of the different tax frameworks in each state.
Some states offer a loss-carryover provision, which allows sportsbooks to deduct losses in excess of their winnings. However, this isn’t the only way to reduce the tax bill. Also, if you earn more than $164,925, you will have to pay an additional tax.
Sportsbooks are working with narrow profit margins, and they need to be able to adapt to changing state tax systems. It’s important to compare the tax systems in different states before opening a business.
Pennsylvania sports betting operators can deduct promotional credits and bonuses. However, this puts them on the hook for 24.6% of their total gross gaming revenue. Indiana sportsbooks have been paying a 9.5% effective tax rate since they launched. Michigan sportsbooks have an effective tax rate of 3.4%.