If you thought that the proposed 50% tax rate for New York mobile sports betting was too high, then brace yourselves. The State Gaming Commission has just confirmed that the new and improved tax rate will be no less than 64%… the highest in the nation.
The operators who applied for licenses to provide mobile sports bets in the state have been informed of this change, and the Commission has given them until this coming Monday, October 25th, to amend their bid proposals if they did not include a tax rate of at least 64%. Well, that’s pretty nice of them, right?
The Gaming Commission had set a date of December 6th, 2021, to make a decision of which operators would receive New York mobile sports betting licenses. Now that a new tax rate has been released, however, speculation is that the selection process may be much faster.
Now, we agree that a 64% tax rate sounds just a bit insane. However, one of the license applicants in the state did hire an analytics team to project what the state would earn in tax revenue over the first five years of regulation. Starting with $585 million the first year, and rapidly accelerating to well over $1.7 billion by year five.
With that sort of money at stake, it may be possible for operators there to carve out profits… even if the tax rate borders on extortion. However, a representative for the license applicant did add that “A higher tax rate…will inhibit the market by creating economically unfeasible conditions”. That statement was included in their bid package.
All told, there have been a total of six bidders for New York mobile sports betting licenses. Of those, three came from a single sports betting provider, and another three from groups of providers.