Sports Betting Operators Seek State Tax Break

Mobile sports gambling has barely been legal for two months in New York. Nevertheless, the gambling industry is already looking for a tax break on mobile sports gambling revenue.

According to City & State New York, a gambling industry-supported bill would “effectively [gift] gambling companies hundreds of millions of dollars that would have gone to education.” Bill S.8471-Addabbo/A.8658-A-Pretlow would cause the tax rate on mobile sports gambling revenue to gradually decrease once new operators begin doing business in New York. At present, nine operators are doing business in the Empire State. The current tax rate of 51% would drop to 50% if one more operator starts doing business in New York, to 35% if four new operators begin doing business here, and to 25% if six new operators begin doing business here.

The ostensible purpose of cutting the tax rate on mobile sports gambling proceeds is to entice new gambling operators to do business in New York (thus bringing more tax revenue into the state’s coffers) and keep existing operators from leaving the state due to insufficient earnings. Even if protecting and augmenting the mobile sports gambling market were a valid reason for passing a law (it isn’t), the proposed tax cut would still be a bad idea. City & State New York has reported that more operators are already interested in doing mobile sports gambling business in New York at the current tax rate. Furthermore, mobile sports gambling operators have already earned more than $100 million in the short time that they have been conducting business here.

At New Yorkers for Constitutional Freedoms, our message to the Legislature is clear: No tax cuts for mobile sports gambling operators.