Mobile sports betting has been a success in New York, but the state’s high tax rate could have an impact moving forward, officials with DraftKings and FanDuel say.
The two organizations said at a hearing on Tuesday that the tax rate should be lowered from 51% on gross gaming revenue.
It’s the highest tax rate among states with authorized mobile sports betting. It helped the state draw $709 million in revenue.
The CEOs of the two companies don’t believe the state will continue to see that kind of success, citing estimates that bets could decrease by 10-20%.
They noted that if tax rates aren’t lowered, operators like FanDuel and DraftKings won’t be able to spend on marketing and promotional credits. Worse yet, DraftKings said the state would become unsustainable with an effective tax rate of 70% with other taxes calculated.
The solution, lawmakers say, could be more operators. There’s a proposal on the table now in Albany to decrease the tax rate to 35% if there are 13-14 operators, and 25% if there are 15 or more.
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