New York Sports Betting Handle Dips in September, Tax Rate to Blame?

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New Yorks September Sports Betting Handle Trends Downwards

The entire sports betting industry was anticipating the surge of action that September brings thanks to the start of the NFL season and the windup to the MLB postseason, but in New York that sports gambling market seemed to slow down during the course of that month.

According to the New York State Gaming Commissions most recent update, that state took in almost $330 million worth of wagers whats known as the handle in the first week of September but then that figure dropped by almost $30 million as the month wore on.

Thats during a time when those weekly figures should be surging especially given that New York had some serious sporting events taking place with the NFLs Buffalo Bills on national TV twice while the New York Yankees Aaron Judge was busy chasing the MLB homerun record.

The odd thing was that during that same time of the downward handle trend in September, state sports betting revenue was as healthy as ever, something the Founder and Chair of Public Policy Group Orrick, Jeremy Kudon attributes to that states higher tax rates.

Sportsbook Public Policy Group Blames NYs High Tax Rates for September Dip

In a recent Tweet, Orricks founder Kudon attempted to explain how New Yorks sports betting market is adversely affected by the way they tax the sportsbook operators there at the highest rate in the industry, 51%, as well as how they tax any promotional giveaways, saying:

The data clearly shows that a 51% tax rate does NOT workespecially if promo credits are taxed at 100%. As predicted, operators cannot afford to invest in promos, ads, or other tools necessary to develop the NY marketwhich is leading to materially lower handle figures.4/5

Jeremy Kudon (@JKudon) September 23, 2022

The argument is that at these tax rates, the operators there cannot afford to offer discounts and freebies to potential customers so which limits how effective they can be in terms of developing the New York state sports betting market and growing their customer base.

And all that equates to the decrease in handle they are seeing there in September, according to Kudon, a theory no doubt shared with all the sportsbooks who operate in New York forced to pay such a steep cover charge just to be a part of that potentially lucrative market.

There have already been failed attempts to adjust New Yorks high sports betting tax rates.

Tax Rate Debate Continues, Next New York Legislative Session Begins January 2023

Back in March 2022, New York Assemblyman Gary Pretlow introduced a bill to reduce the states 51% sports betting tax rate and to increase the number of operators allowed but it failed to pass, and no other legislation has been seriously debated since then.

The next New York legislative session starts on January 4, 2023, so chances are either Assemblyman Pretlow or some other state lawmaker will once again introduce a bill that would adjust the way they handle that market, including tax rates and the number of licenses available.

Meanwhile, New Yorks neighbors are going a different route and charging sportsbooks far less to operate there, with New Jersey at 14.25%, Pennsylvania at 36%, and Connecticut at 18% for online and 13.75% for retail, with only New Hampshire matching New Yorks steep 51% rate.

The market should straighten all this out as the new US legal sports betting industry gradually matures, so expect New York to adjust accordingly at some point in the future, and in the meantime Empire State gamblers will continue to enjoy legally putting money on their games.

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