June’s online sports betting numbers are out for New York and New Jersey. They show that the New Jersey market is growing at a faster clip than New York’s year over year. New York’s sports betting growth has slowed this year.
The New York sports betting market is still the largest in the country. Compared to New Jersey, New York’s total online sports betting revenue after just 18 months of operation is almost equal to New Jersey’s after five years.
But New York’s growth is slowing compared to New Jersey, which boasted a much higher year-over-year increase in June.
A recap of June’s sports betting numbers
In June 2023, New Jersey saw total online sports betting revenue of $62.1 million, compared to $35.8 million in June of 2022. That’s a growth rate of over 73%.
In June 2023, New York operators made $103.8 million from online sports betting, significantly higher than New Jersey’s revenue total. But in June 2022, New York’s online sports betting revenue totaled $72.4 million, representing a yearly growth rate of just 43%.
Operators blame the NY sports betting tax rate
New York has the highest online sports betting tax rate of any state, at 51%. By comparison, New Jersey’s tax rate is just 14.25%.
Sports betting operators have been outspoken about this. Currently, they’re lobbying the New York state legislature for a more forgiving tax rate.
“The market is built on an unstable foundation: namely, a 51% tax rate, which is by far the highest tax rate in the nation. Based on DraftKings’ knowledge and experience in shaping sports wagering markets across the country, in our view, the State’s revenue projections are simply unsustainable with this tax rate,” said DraftKings CEO Jason Robins in a published statement for a hearing with lawmakers in January.
He claimed DraftKings NY and others would be forced to take “draconian” measures to remain viable.
FanDuel Group President Christian Genetski added betting was down 20% since the first three months after New York’s launch. He said FanDuel NY is already implementing cost-cutting measures and investing 50% less in the New York market.
Could a change to the tax rate be coming?
New York is sticking to its tax rate so far this year. However, Sen. Joseph Addabbo has said his team is looking at it for next year. Addabbo is the chair of the racing, gaming, and wagering committee,
Addabbo has proposed legislation that would decrease the tax rate on the condition that the state increased its sports betting licenses. The legislation did not pass in the 2023 session.
He told New York Sports Day the argument needs to be made that changing the tax rate would benefit the state of New York, not just line sportsbook operators’ pockets.
“You can’t argue that [New York’s sports betting market] is not the number one product in the country,” Addabbo said.
A change in tax rate would not be unprecedented. Ohio, which launched in January with a 10% tax rate, doubled that tax as part of its most recent budget.
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