New York Sports Betting Revenue Changes, Trends, and Insights

New York's gaming revenue has blown up since online sports betting launched in 2022. That fiscal year, the state saw $1.36 billion in gross gaming revenue (GGR) thanks to the rapid adoption of mobile betting and a strong market for pro and college sports.

In 2023, the momentum continued with a 24% year-over-year increase, reaching $1.69 billion in revenue. With a 51% tax rate on gross gaming revenue, New York remains the national leader in tax collection from sports betting, delivering significant fiscal benefits to the state (USA Today, 2023). In Q4 2023, New York stood in a class of its own regarding taxes collected, underscoring its dominance in the market.

By October 2024, New York's handle (total bets placed) surpassed $20 billion, while the annual revenue exceeded $2 billion for the first time. The state maintained an average hold rate of 9.25%, with tax revenue alone amounting to over $1 billion.

• October 2024: New York sportsbooks set a state record for the highest handle in a month, with bettors making wagers totaling $2.3 billion. (ESPN, 2024)
• October 2024: New York passes a law increasing restrictions on gambling advertising that requires warning about negative consequences and addictive effects. (Office of Governor Kathy Hochul, 2024)
• September 2024: ESPN Bet launches in New York. (iGamingBusiness.com, 2024)
• July 2024: The New York market shows signs of slowing, with its worst month for sports betting handle since August 2023. (iGamingBusiness.com, 2024)

New York sports betting has become the top-performing market in the US (ESPN 2024) with a huge handle and tax revenue. Online betting and retail options have made for a strong and growing market since 2022.

2022

New York had a handle of $16.2 billion and a gross gaming revenue (GGR) of $693 million in its first year with online sports betting. Those debut numbers showed how big the appetite for sports betting in the state was and provided a jumping-off point for the industry to thrive.

2023

The market's handle grew to $19.1 billion—an 18% increase from 2022— and generated $861.8 million in tax revenue. Its success demonstrated that New York's high tax model is working to bring in revenue for public programs — with a focus on education (Office of Governor Kathy Hochul, 2024) —  without diminishing user interest.

Online Sports Betting Revenue Highlights

• New York's sports betting handle increased by over $2.9 billion between 2022 and 2023.
• The state's GGR was $330.8 million higher in 2023 than in 2022 and reached a total of $3.05 billion for both years.
• Sports betting tax revenue went up over 24.3% between 2022 and 2023.

New York's sports betting market is defined by its 51% tax rate on GGR, the highest in the United States, along with New Hampshire and Rhode Island.

This rate has been pivotal in establishing New York as the top-performing state in terms of revenue generation from sports betting. Despite its steep nature, the tax model has successfully driven substantial public benefits without significantly dampening market engagement.

Comparison to Other States

• New Jersey, a pioneer in sports betting, taxes GGR at 14.25% for online sports betting. While New Jersey remains a strong market, its tax revenue falls short of New York's due to its lower rates and smaller overall handle.
• Pennsylvania also imposes a relatively high tax rate at 36%, but New York's higher rate and larger population mean more revenue for the government than its neighbor receives.
• National Averages
  Across most states, tax rates on sports betting range from 10% to 20%, with only a few approaching or exceeding 30% (TaxFoundation.org, 2024).

Benefits of New York's High Tax Model

• Record Tax Revenues: In 2023, New York collected $861.8 million in taxes, surpassing all other states.
• Public Funding: The tax revenue supports programs for education, youth sports, and gambling prevention and treatment. For instance, $6 million annually is allocated to combat problem gambling. (Office of the NY State Comptroller, 2023)
• Sustainable Growth: Despite concerns about the high tax burden discouraging operators, New York's market continues to grow, with revenue increasing by 24% from 2022 to 2023.

Challenges and Critiques

• Market Competition: While the tax rate hasn't diminished user engagement, it's possible that it could deter future operators from entering the market or lead to higher costs for bettors over time.
• Operator Margins: This high tax rate could limit sportsbooks' profitability, causing them to pass costs on to consumers. DraftKings' proposed 3-4% surcharge on winnings for bettors in high-tax states could be the beginning of this trend. (New York Post, 2024)