The rollout of regulated sports betting in the state of New York continues to face hurdles as legislators continue to develop the framework for regulatory oversight and taxation of the industry.
Andrew Cuomo, the former governor of the state, set a target of $500 million annual sports betting turnover, meaning revenue share through taxation in the state could equate to a 50/50 split between operators and state administrators, and it could potentially be as high as 60%.
Additionally, only four sportsbook licences are to be improved in the state, and so a number of ‘super bids’ have been organised between various operators. These joint bids have included one involving FanDuel, DraftKings, BetMGM and Bally’s, with bet365 reportedly the only operator looking at a solo bid in the state.
Breaking down the ‘New York Tax Matrix’ on the latest episode of the Legal Sports Report, Adam Candee and Dustin Gouker highlighted what they believed were the proverbial ‘red pills’ and ‘blue pills’ for the system.
Candee began: “The red pill apparently is ‘do you want to pay 64% on your taxes?’ But the blue pill takes you right back to where you are right now – which is nowhere, down the rabbit hole.
“What we’ve seen is that the top bid is in in New York. We don’t know placed the top bid, but the fact that we are now seeing tax rates means that the New York State Gaming Commission has selected its top bid, and now other bids that have selected lower tax rates have the information on what tax rate will be to decide if they want to match that and be a part of the New York sports betting ecosystem.”
The tax rate of 64%, he observed, is by far the highest in the country, but he also shared his view that the number of operators – the aforementioned four sportsbook operators in addition to two platform providers – will likely be expanded.
“As you put more platform providers and more operators into the state, the sliding scale goes down on that tax rate,” he continued.
“The way we gave it out, it kind of looks like 50% is one of the more likely numbers of where this lands that was the threshold that former Governor Andrew Cuomo said before he resigned, and we should find out more in the next few weeks here about who placed those bids, who was scored highest and who actually will get a license.”
Dustin Gouker maintained that there is still very little information which can indicate which firms have been chosen as the starting four sportsbooks in the Empire State.
“It boils down to a small number of operators – 64% tax rate; large number of taxed operators probably around 50%; unlimited number of operators, 35%,” he explained.
”The thing that makes the most sense when I look at it is 12 operators and 50% That’s it,, there’s no reason for them to add more operators to them 35%.”
Source – Legal Sports Report YouTube Channel
