Online sports gambling went live in the state of New York on January 08, 2022, just days ahead of the beginning of the NFL postseason, and quickly leaped to the front of the pack. The Empire States did not even need any time to work out the kinks of their new legislation. Less than a month after online sportsbooks went live New York already led the nation in the dollar value of bets placed, raking in $1.62 billion in January 2022.
It does not hurt that several of New York’s professional sports teams had seasons for the ages in 2022. Following a rebuild that took nearly half a decade, the Rangers catapulted from an afterthought to a team that came within two wins of a Stanley Cup Final appearance. Led by superstar quarterback Josh Allen, the Buffalo Bills spent much of the 2022 season as Super Bowl favorites. While their season came to an end earlier than many expected, they have got some of the best odds to win their first Lombardi Trophy next year, listed at around +650 at a variety of New York sport betting promos.
Right now, New York is the largest state by population in the United States where online sports wagering is legal. Politicians in California and Texas have long opposed the prospect of legalizing sports betting, while Florida’s launch never got off the ground due to a legal battle. The Seminole Tribe sued the Sunshine State just days after sports wagering went live for violating the Indian Gaming Regulatory Act, saying that Florida violated their autonomy by preventing them from offering online wagering platforms. As such, Florida was forced to pause all online wagers until they worked out the details of their settlement or fight the suit in court.
As it looks like it will be some time before other massive markets legalize sports wagering, New York will pace the country for some time. 13 months into the tenure of legalized online betting in the Empire State, here is a look at how the law change has impacted the state of New York and its people.
While some of the benefits of sports wagering are plain to see (like the potential boon it provides for those willing to test their luck), other positives are less obvious.
New York Online Betting, A History
Getting to where New York is now was a drawn-out legal process: former governor Andrew Cuomo was reluctant to give sportsbooks the green light, claiming that betting was against the state’s constitution. Cuomo eventually caved in towards the end of his tenure, albeit with the stipulation that New York’s tax rate on successful wagers would lead the nation. The Empire State’s 51% Gross Gaming Revenue (GGR) tax rate on online wagers is tied with Rhode Island and New Hampshire for the highest in the United States, dwarfing rates in neighboring New Jersey (14.25%), Connecticut (18%) and Pennsylvania (36%).
The lofty tax rate is something to keep in mind for prospective bettors before Tax Day rolls around the following April, especially when combined with the 24% federal GGR tax. Bettors can find some solace in the fact that the money they don’t get to keep is going to an excellent cause, though.
Cuomo and the New York State legislature legalized sports wagering as they hashed out the details of the state budget in April 2021. As they set the tax rate, they earmarked the revenue for primary and secondary school funding, youth sports programs, and assistance for those with gambling addictions. Unlike the federal taxes, which most New Yorkers will not ever see a dime of, over $700 million in revenue brought in by the GGR tax is going to good causes in local communities.
One Big, Happy Family
Interestingly, states, where sports betting is already legalized, have not found themselves fighting to corner the same market. Pundits expected New Jersey’s gambling revenue to fall once New York’s sportsbooks went online as the millions of potential wagerers in New York City would not have to cross the Hudson River to place bets anymore—before New York legalized online wagering, experts estimated that 25 to 30 percent of the Garden State’s gambling revenue came from the pockets of New Yorkers.
Even with the steepest gambling tax rates in the nation, the convenience of wagering from the comfort of one’s home has kept bettors within state lines, and New Jersey continued to break its own records even with New York to compete. As Massachusetts’ sportsbooks went online last week, that is something to keep in mind: New York will not lose much if any, traffic to their northeastern neighbors.