Legal Mobile Sports Betting in New York Continues to Face Challenges

Dave Schwab Sports Betting Expert

3 minute read

Earlier this year, it appeared that New York would expand its market with legal online sports betting by the end of 2021.

The only legal form of sports betting in the state right now is through retail sportsbooks located in upstate casinos. All the momentum was behind this effort until regulatory logistics bogged things down.

As a close neighbor to New Jersey, the Empire State realizes how much potential tax revenue it is leaving on the table. The Garden State is the biggest legal sports betting market in the US in terms of monthly betting volume and revenue.

New York has been working through the regulatory process the past few months with no end in sight. In-fighting on how mobile sports betting should be taxed is one issue. Accessibility through multiple sportsbook operators is another issue standing in the way.

Right now, industry estimates point to as much as 25% of New Jersey’s betting volume coming from New York bettors. Most of that volume is being generated through mobile wagers using New Jersey sportsbook operator apps.

The overall amount of New York betting volume from upstate casinos is negligible as compared to this state’s mobile betting volume potential. Yet, regulators are still deciding on how to move forward.

The proposed taxation model for in-state operators is one major cause for the continued delay. Referred to as a "pricing matrix for prospective providers", this is a far more complicated means for taxing mobile sportsbook providers.

Tax rates under this system could range from 35% all the way up to 64%. This is viewed rather negatively from an operator’s standpoint. However, given the potential size of the marketplace, books could still make a handsome profit.

Given this wide range, it is safe to assume that any mobile sports betting provider in New York is facing a tax rate around 50%.

As a point of comparison, the highest mobile tax rate among states with legal sports betting is 36% in Pennsylvania. Interested parties such as BetMGM and Caesars Sportsbook had to submit applications that adhere to a "final tax-rate matrix" to move forward in the process.

Given a few other regulatory hurdles that need to be cleared, it is unlikely that legal mobile betting in New York will be available in 2021. Successful applicants still have to go through the licensing process.

Some optimists believe the state can still cash in on the NFL’s Super Bowl in early February of 2022. Given the way this entire process continues to get bogged down, it is very possible that New York misses out on the biggest single sports betting event of the year.

Written by Dave Schwab, our US Sports Betting Industry Expert. You can read more about our author's expertise here.

Dave Schwab

Dave Schwab has been covering the sports betting industry for the past 12 years as the main focus of his specialty marketing company for online content. This endeavor followed a previous career in the field of sales and marketing in the wholesaling sector.Most of his weekly pieces focus on the rapidly expanding legal US sports betting industry. However, he still does extensive work covering betting angles that can provide a competitive edge to avid players. Dave believes that it is always a challenge to take past results and current form to try and correctly determine a future result. Sports brings out the unpredictability in what should be a fairly predictable outcome based on the stats, facts and recent trends in a particular matchup. More from Dave Schwab