SPORTS BETTING

US – Online gaming omitted from New York’s budget despite online betting being ‘game-changer in tax revenue’

By Phil - 17 January 2024

Despite online sports betting being heralded as a ‘game-changer in tax revenue,’ New York State Governor Kathy Hochul didn’t include its vertical brother online gaming in her 2025 executive budget, delivering a huge blow to hopes that the revised gaming bill submitted last week by New York state senator Joseph Addabbo would make progress over the coming year.

Online gaming’s exclusion comes as the state’s online sports betting sector roared home with revenues of $862m in just its second year of operation.

Upon the two-year anniversary of mobile sports wagering in New York State, Governor Kathy Hochul also announced the State has collected more than $1.55bn in taxes on such bets, most of it to be used for education. Last year’s $862m, when added to $693m as well as $200m in licensing fees collected in 2022 brings the total generated revenue to $1.75bn, which has shattered national records for mobile sports wagering.

“Over the last two years, New York is the clear leader in providing responsible entertainment for millions while bringing in record-shattering revenue for education, youth sports, and problem gambling prevention,” Governor Hochul said. “I look forward to this third year of our successful gaming policies that deliver top tier mobile sports wagering experiences. We will continue to generate revenue that will enrich the lives of New Yorkers, all with important safeguards in place to help those who need it.”

Since the United States Supreme Court struck down the Professional and Amateur Sports Protection Act in May of 2018, New York State ranks third in overall handle — the total amount of dollars wagered — among states. New Jersey is first with $44.2bn, Nevada is second with $36bn. New York’s $35.7bn is a close third but while New Jersey and Nevada have offered mobile sports wagering for five-and-a-half years and 11 years respectively, New York has offered it for just two. During that time, New York State has nine of the top ten all-time US monthly sports wagering handles, with New Jersey occupying ninth on that list for November of 2023.

New York State Gaming Commission Chairman Brian O’Dwyer said: “The record-breaking numbers speak for themselves: Governor Hochul’s smart gaming policies continue to generate billions of dollars for our schools, youth sports and responsible gambling programs. The Gaming Commission looks forward to another beneficial year for New York and will continue to uphold the integrity of all regulated gaming in the state.”

New York State Office of Addiction Services and Supports Commissioner Chinazo Cunningham, added: “This funding is supporting our ongoing work to educate the public about responsible gambling, as well as increase access to help and support for those affected by problem gambling. We are continuing our efforts with our partners, including the Gaming Commission, to ensure that all New Yorkers can access the important resources they need in communities across New York State.”

State Senator Joseph P. Addabbo, Jr. said: “Mobile sports betting has proven to be a game-changer for New York, generating over $1.55bn in tax revenue in just two years. This significant influx of funds will not only help to create new job opportunities, bolster our education system and improve the resources to assist individuals with an immediate or imminent gambling problem, which is critically important. By capitalizing on New York’s status as a sports mecca both nationally and globally, we position ourselves to provide our residents with a premier, safe and immensely successful mobile sports betting product for generations to come.”

Assemblymember Gary Pretlow said: “I am thrilled that the initial framework we proposed for Mobile Sports Betting in the Legislature was the foundation and catalyst for its success. We introduced a plan that would give gaming stakeholder an opportunity to engage with savvy New York sports patrons. As I commented last year when the numbers were record breaking then. I’m ecstatic that the primary benefactors are education, our youth and responsible/ problem gambling.”

According to GeoComply, a software firm used by sports books to ensure geolocation requirements, more than 5.6 million unique sports betting accounts have been created since launch in January of 2022, conducting more than 2.6 billion transactions.

The two-year anniversary of mobile sports wagering in New York State was Monday, January 8, 2024. Through January 7, the total mobile sports wagering handle reached $35.7bn and generated a total net revenue to education of $1.57bn.

The top four sports have accounted for over $11.1bn in mobile sports wagering handle: NFL $2,994,128,825; MLB $3,285,822,760; NBA $3,679,461,779; NCAAF $1,114,178,066.

Revenues from mobile sports wagering are distributed as follows: $5m to fund sports programs for underserved youths, $6 million to fund problem gambling education and treatment, with the remaining majority to fund education aid.

In December 2023, New York online sports betting revenue reported $188.3m, smashing the existing record of $166.3m set in October 2023 by 13.2 per cent and marking the third consecutive month that players spent more than $2bn on online sports wagering.