• Loading stock data...
Tuesday, July 15, 2025

Sports Betting Operators Struggling With New York’s High Tax Rate

  • Each operator is required to pay a 51% tax rate to the state for 10 years.
  • The average sports-betting tax rate in the U.S. is 19%, per Morgan Stanley.
Danielle Parhizkaran/USA TODAY NETWORK

New York’s mobile sports betting laws have forced gambling operators to cautiously watch spending on marketing and promotional offers to combat ongoing financial losses. 

New York got off to a hot start with an official handle that totaled more than $1.62 billion in January — topping the single-month record for any state despite only six mobile operators. 

A few of those operators, including DraftKings and Flutter Entertainment’s FanDuel, have requested New York legislators to change laws regarding current sports-betting tax rates

  • Each operator is required to pay a 51% tax rate to the state for 10 years.
  • The average sports-betting tax rate in the U.S. is 19%, per Morgan Stanley.

New York’s current tax rate for mobile sportsbooks has led to huge profits thanks to more than 20 million residents in the state, making it the largest online sports betting market in the U.S.

Gov. Kathy Hochul’s budget plan reportedly expects $357 million in sports betting tax revenue in FY2023.

Double Tax 

Operators in New York are also taking a step back due to promotion revenue that is taxed by the state, which has made it “untenable to run a business,” according to the Tax Foundation. 

As a Bloomberg report notes, if bettors receive and lose a free, promotional bet, it’s still counted as gross revenue for the sportsbook — even though no money changed hands.

The tax rate as a percentage of revenue could be more than 77%, including federal tax.

Linkedin
Whatsapp
Copy Link
Link Copied
Link Copied

What to Read

DraftKings
exclusive

DraftKings in Talks to Acquire Prediction Market Railbird Exchange

Sportsbooks and prediction markets are becoming increasingly intertwined.

Murphy: Club WC Snags Won’t Derail Biggest Event ‘in Human History’

New Jersey’s MetLife Stadium is the concluding site of both FIFA events.
Sports are shown on TVs behind a bar as guests enjoy the grand opening of DraftKings Sports & Social in Ohio.

California AG Has Declared Daily Fantasy Sports Are Illegal. Now What?

The opinion might spark a broader DFS conversation in the state.

Featured Today

May 31, 2025; Philadelphia, PA, USA; Sydney McLaughin-Levrone (USA) reacts before the women's 100m hurdles during the Grand Slam Track Philadelphia at Franklin Field
exclusive

Track’s New Money Is Running Into Old Problems

The sport’s big-money era has hit some speed bumps in 2025.
Bobbleheads are seen at Vintage Indy Sports, Tuesday, April 29, 2025 in Speedway. The local sports memorabilia store opened recently.
July 12, 2025

Baseball’s Bobbleheads Are the Center of the Collectibles Universe

Baseball’s most important keepsake drives long lines—and big business.
Rimouski, QC - JUNE 1: Final Game of the 2025 Memorial Cup between the Medicine Hats Tigers and the London Knights on June 1, 2025, at the Colisée Financière Sun Life in Rimouski, Qc.
July 11, 2025

CHL Is Facing a ‘Pandora’s Box’ of Questions Amid NCAA Talent Departure

As players defect to college, the Canadian Hockey League won’t cede ground.
Jun 28, 2025; Arlington, Texas, USA; Seattle Mariners catcher Cal Raleigh (29) bats during the game between the Texas Rangers and the Seattle Mariners at Globe Life Field.
July 9, 2025

The Torpedo Bat Business Is Still Going Strong: ‘Here to Stay’

Demand for the oddly shaped bats has stayed strong across the sport.
Dec 29, 2024; Philadelphia, Pennsylvania, USA; Dallas Cowboys quarterback Cooper Rush (10) passes the ball against the Philadelphia Eagles during the first quarter at Lincoln Financial Field.
July 3, 2025

California AG Says Daily Fantasy Sports Are Illegal

The AG rejected arguments that DFS are games of skill, not chance.
July 8, 2025

Betway Parent to Complete U.S. Exodus, Blames Tax Volatility

“Recent regulatory developments” were cited. 
Sponsored

Game On: Portfolio Players Stories, Brought to You by E*TRADE from Morgan Stanley

Dealmaker Jeffrey Kaplan maps the evolution of sports as an asset class
Jun 9, 2025; Cleveland, Ohio, USA; Cleveland Guardians starting pitcher Luis Ortiz (45) throws a pitch during the first inning against the Cincinnati Reds at Progressive Field.
July 3, 2025

Guardians Pitcher Luis Ortiz Put on Paid Leave Amid MLB Gambling Probe

Reports say the investigation is tied to gambling.
Jun 19, 2025; Indianapolis, Indiana, USA; Indiana Pacers guard Andrew Nembhard (2) drives to the basket against Oklahoma City Thunder forward Chet Holmgren (7) during the third quarter during game six of the 2025 NBA Finals at Gainbridge Fieldhouse.
July 1, 2025

‘Existential Threat’: Underdog Sports Sues to Stop AG’s Fantasy Sports Opinion

The California AG is expected to release his opinion by Thursday.
Mar 15, 2025; Detroit, Michigan, USA; Detroit Pistons guard Malik Beasley (5) celebrates in the first half against the Oklahoma City Thunder at Little Caesars Arena.
June 30, 2025

Malik Beasley Is Latest Betting-Related Headache for NBA

It’s the third NBA betting scandal in the last year-and-a-half.
Quincy Taylor
June 17, 2025

Several Americans Banned in British Basketball Game-Fixing Scandal

Five former Surrey Scorchers players were hit with lengthy gambling suspensions.