Assemblyman J. Gary Pretlow, a longtime proponent of New York sports betting, said today that the state’s current sports betting tax rate needs to be decreased.
Speaking with Assemblywoman Michaelle Solages during a New York State Black, Puerto Rican, Hispanic, and Asian Legislative Caucus Twitter Space episode today, Pretlow said it is not a secret that he is displeased with how some aspects of New York sports betting are shaking out.
Lower NY Tax Rate Helps Business
Mainly, Pretlow said his displeasure stems from New York’s 51% tax rate, the highest sports betting tax rate in the country, and the lack of sportsbook operators doing business in the Empire State.
“I’ve introduced various pieces of legislation that would not only lower the tax rate, but be more inclusive for New Yorkers,” Pretlow said during the social media conversation.
A reduction in the tax rate, and allowing more sportsbooks to operate in the state, would increase jobs, strengthen the sports betting market, and most likely increase tax revenues as well.
“Aggregate tax revenue would be, if not more, the same as we’re getting now. And it’s more jobs for the state,” Pretlow said.
As it stands, there are nine operators that are licensed in the state, with only seven operational at this point. None of the operators are minority controlled, Pretlow said, which makes for a lack of diversity among the state’s offerings.
The only company to apply for a sportsbook license, he said, with minority control was Fanatics Sportsbook. Jay-Z is a partner with the company, but the New York State Gaming Commission ultimately did not award the company with a license.
More NY Operators Needed
There is no reason New York can’t have the same amount of operators as New Jersey. The Garden State set its maximum operator number at 40 sportsbooks.
The original proposal he and Sen. Joseph P. Addabbo called for allowed for up to seven skins per New York casino, which would have put the initial operator maximum between 21 to 25 apps, he said.
A reduced licensing fee, such as $20 million to $25 million, would also open up the market for smaller sportsbooks. Sportsbook companies must currently pay a $50 million licensing fee to operate in the state.
“I was not, and am not, happy with how some of this is shaking out and I’m looking to make changes,” Pretlow said.
The 51% tax rate makes it nearly impossible for smaller, “boutique apps,” to operate in New York, said Kaitesi Munroe, a Principal for Cozen O’Connor Public Strategies, who also spoke in the social media episode.
The licensed New York operators, some of the biggest sportsbook companies in the world, are already saying that a 51% tax rate may not be sustainable, Munroe said.
“If they’re not able to be sustainable, I couldn’t imagine the boutique ones to be successful here,” she said.