New York online sports betting has the highest tax rate in the country, but according to a CEO of a national online sportsbook company the state could be looking to make a change to its rate soon.
Jason Robins, CEO of DraftKings NY, said today during the company’s fourth-quarter earnings call that there had been “some chatter” that the New York legislature would consider reducing the online sports betting tax rate during this upcoming legislative session.
“There has been some chatter of New York considering in this upcoming New York legislative session adjusting the tax rate down. The approach we’re taking is a wait and see on that. If that happens, depending on where it lands, we’ll adjust accordingly. If it doesn’t happen, then we’ll adjust accordingly. We’re taking a wait and see approach to this legislative session,” Robins said in the earnings call.
No Tax Rate Reduction Discussions Yet?
New York’s online sports betting tax rate sits at 51%, the highest online sports betting tax rate in the country. It has already resulted in more than $70 million in tax revenue for the Empire State since online sports betting’s launch on Jan. 8.
Sen. Joseph P. Addabbo Jr., a longtime proponent of sports betting and a catalyst for the state’s legalization of online sports betting, told Elite Sports New York through a text that discussions on potentially reducing the tax rate had yet to happen.
“While anything is possible in Albany, there has been no discussion on the tax rate,” Addabbo told ESNY.
The seven current online sportsbook operators in New York are surely rooting for the “anything is possible” statement in Addabbo’s comments. Even a slight reduction in New York’s tax rate would make the country’s top sports betting market very profitable for sportsbook operators.
DraftKings’ New York customer acquisition has been efficient in the early going, Robins said, and early player cohort results have been strong. A reduction in the tax rate would be welcomed.
“We’re hopeful that with an appropriate tax rate it can be a very profitable market for us. But if not, we’ll make the necessary adjustments to ensure that it meets the two to three year payback and it becomes a very profitable market for us in the long run,” he said during the earnings call.
DraftKings’ New York Sports Betting Totals
Since online sports betting’s launch on Jan. 8, DraftKings has reported a total handle of $454.9 million through the week ending Feb. 6.
- Week-ending Jan. 9: $38.5 million
- Week-ending Jan. 16: $95.9 million
- Week-ending Jan. 23: $131.05 million
- Week-ending Jan. 30: $102.2 million
- Week-ending Feb. 6: $87.2 million
It reported gross gaming revenue in the same time period at $35.78 million.
- Week-ending Jan. 9: $7.02 million
- Week-ending Jan. 16: $3.4 million
- Week-ending Jan. 23: $10.8 million
- Week-ending Jan. 30: $5.3 million
- Week-ending Feb. 6: $8.7 million