Study Finds NY Contributes One-Third of US Sports Betting Tax
LISTEN TO THIS ARTICLE:New York accounts for more than 37% of the total tax revenue generated from sports betting in the United States, as revealed by a recent report.
The findings were obtained through the Quarterly Survey of State and Local Tax Revenue (QTAX), conducted by the United States Census Bureau, which recently included sports betting in its list of tax sources.
In Q3 of 2023, QTAX reported that sports betting contributed nearly $506 million in national tax and gross receipts, marking a 20.5% increase from Q3 2022. However, the figure fell below the $571.5 million recorded in the second quarter of 2023.
New York led the market in terms of sports betting tax revenue in Q3 2023, with $188.5 million. The figure is almost 5 times ahead of Indiana’s $38.6 million, which is in second place. The third and fourth positions were occupied by Ohio and Illinois, with $32.9 million and $32.4 million, respectively. Pennsylvania ranked fifth with $28.8 million.
Largest US Betting Market and Tax
The reasons why New York consistently submits high can not be separated from the nature of its market. New York has the largest sports betting market in the United States.
Since it legalized sports betting two years ago, at least $35.7 billion has been wagered in the state. With only one exception during this period, New York has consistently maintained a higher betting handle than any other state every month. New York also has the highest tax on gross gambling revenues at 51%.
At the beginning of the week, the New York State Gaming Commission released its January betting market results, showing an impressive handle of $1.96 billion during the month. The handle was 9.5% higher year-to-year but dropped 3.9% compared to December’s $2.04bn. The state recorded a revenue of $211.5m, its highest monthly revenue so far, beating the previous record of $188.3m set in December by 12.3%.
FanDuel Leads Market
Regarding individual operators, FanDuel continues to be the market leader in New York. The operator handled $867.1m in bets during the month and posted a revenue of $109.2m, the highest figure ever recorded by a single betting operator in the United States. It is also the first time that a licensee will surpass $100.0 million in a single month. DraftKings was in second spot with its highest all-time monthly revenue, $71.0m off a handle of $663.8m.
In related news, Penn Entertainment revealed on Tuesday that it had agreed to acquire Wynn Interactive Holdings' sports betting licenses in New York, which will pave the way for the introduction of ESPN Bet in the state in 2024. The deal worth $25 million will see Penn obtain the licenses currently held by the Wynn Resorts entity, WSI US.
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