New York Lawmakers Pushing for Modifications to Sports Betting Bill
Lawmakers Push Hard
Senate Bill S8471 was filed on Friday by Joseph Addabbo, Chairman of the Senate Racing, Gaming, and Wagering Committee as a “sister bill” to Bill A8658A filed earlier this year by Assembly Racing and Wagering Committee Chairman J. Gary Pretlow. Addabbo and Pretlow are considered to be the top gaming lawmakers in New York City.
The central purposes of these bills are to amend several sections of the previous sports betting bill including an increase in the number of operators, a decrease in the tax rate, qualified minority representation in the New York market, and more. The initial bill signed in 2021 gave approval to nine licensed operators to take bets in the state – the new bill urges the state to have no fewer than 14 mobile sportsbook licenses by January 31, 2023 and no fewer than 16 mobile sportsbook licenses by January 31, 2024.
Details of The Bills
In this proposal, the increase in operators would decrease the tax rate. Once they have between 10 and 12 operators, the tax rate would drop to 50%, 13 or 14 operators would drop the tax rate all the way to 35% and if they have 15 or more licensed operators in the state the tax rate would be a cool 25%.
To make matters better for operators, Pretlow and Addabbo are also fighting to eliminate “promotional wagering credits or other things of value” from gross revenue calculations. Subtracting this amount from their gross revenue greatly decreases operators’ tax liability. The bill furthermore proposes that “in a month when the amount of sports wagering gross revenue for a platform provider is a negative number, such platform provider may carry over the negative amount to the return filed for the subsequent month. However, no amount shall be carried over for a period of more than twelve months after the month in which the amount carried over was originally due.”
But Wait…There’s More!
But this push is doing much more than just redistributing the money in the industry – it’s also looking to implement more diversity within the New York market. The legislation is setting a minority representation requirement whereby two applicants must be entities composed of no more than six individuals of a minority group.
This amendment, coupled with the lower tax rates, should help to open the market up for smaller sportsbooks that couldn’t afford the 51% tax rate, to apply. It should also diversify the market share of the current operators. Currently there are nine licensed operators in New York (eight that are active) and among them are DraftKings, Caesars, FanDuel, and BetMGM which controls over 95% of the gross revenue in the New York sports betting market.
All of this may have to wait until 2023, though. With the fiscal year ending in New York on March 31 and three new casinos looking for homes in New York, it may be hard to transform the tax code and sports betting bill in 2022.