A late start hasn’t prevented New York from reaping the fiscal benefits of legalized sports betting. New York will soon pass the $1 billion mark in taxes collected from its sports betting market.
It’s been less than 17 months since NY online sports betting launched, but its 51% tax rate has led to $979.3 million in tax revenue since January of 2022 from online sports betting alone. Combined with taxes paid from retail sports betting activity, the state has gathered $983.5 million since 2019.
New York collected $70.8 million in tax revenue from sports betting in April, which was up about 5% from the same month a year ago. While total handle dropped compared to March, total handle was up 5.7% year-over-year.
N.Y. will become the third state to hit $1 billion in tax revenue
Only two states, Nevada and New Jersey, have ever collected as much as $1 billion in taxes from sports betting. But those jurisdictions enjoyed years of legal gambling before the landmark United States Supreme Court repealed the Professional and Amateur Sports Protection Act in 2018. That decision cleared the way for other states to pass sports betting laws.
New York tried and failed several times to pass legislation on the matter, before finally doing so in 2019 for retail sportsbooks and 2021 for online sports betting. In nine of the 16 months that the Empire State has had online sportsbooks, total handle (defined as the amount of wagers accepted) has surpassed $1.5 billion. New York is now the biggest sports betting market in the United States.
Sports wagering has been good for the sports betting companies too. Licensed sportsbooks in New York have reported just over $1.97 billion in revenue. Soon, New York will join New Jersey as just the second state to generate as much as $2 billion in revenue for the operators.
Another indicator that New York stands well atop the sports betting industry in terms of taxes collected: the entire U.S. has collected just over $3 billion in taxes from the activity since 2019; and close to $1 billion of that has been from New York sports wagering.
FanDuel, DraftKings lead the way
Because of the high cost of business in New York, some sportsbooks have chosen not to pursue licenses here. Others, notably BetMGM, have expressed a desire to operate small marketing budgets because of the 51% tax rate. That’s left the door open for the top two sportsbooks in the country to compete for supremacy.
FanDuel NY claimed 48.9% of the online sports betting market in April, based on total handle, according to data from the New York State Gaming Commission. DraftKings NY had 32.4% of the mobile market. That means FanDuel and DraftKings combined to gobble up slightly more than 81% of the New York sports betting pie last month.
In just the first four months of 2023, FanDuel has reported roughly $285 million in total revenue in New York from online sports betting. Caesars Sportsbook NY, BetMGM NY and BetRivers NY followed based on total handle in April.
Sports bets made in New York totaled $1.55 billion in April. New York now stands at a little more than $22 billion in all-time total handle, which trails only New Jersey, with $36.7 billion, and Nevada, with $31.9 billion.
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