Gaming companies will be hard-pressed to earn money with a tax of 50% or higher on New York sports betting, Penn National Gaming CEO Jay Snowden says.
“I don’t think a single operator will make money in New York,” Snowden said Thursday during his company’s third-quarter earnings call.
Snowden noted that the only state with a tax rate as high as New York’s is New Hampshire, which taxes sports betting operators at 51%. The top rate in New York also is expected to be 51%.
New Jersey, which benefits from New Yorkers crossing over the state line to place mobile bets, takes 13% from sports betting operators. The rate in Connecticut, which also borders New York, is 13.75%.
Snowden said he has “mixed feelings” about being involved in New York mobile sports betting because of the tax rate and licensing fee. But he added that “you’d probably rather be in than not.”
It appears that Penn National’s group won’t be among those licensed in New York, according to a story last week in the New York Post, with an announcement expected on Monday from the state gaming commission.
Benefit to New York
With a population of more than 19 million, New York is the fourth most populous state in the nation. The state is expected to generate $10 billion in sports betting during 2022.
Even though gaming companies won’t make money in New York, the state will benefit from the revenue, Snowden said.
In Florida, the nation’s third-most populous state with about 22 million residents, mobile sports betting began on the Seminole Hard Rock Sportsbook app this week. Legal sports betting is not operational in the nation’s two most populous states, California and Texas.
Sports Betting Possible by Super Bowl
Penn National, based in Wyomissing, Pennsylvania, bought Barstool Sports in 2020 and markets the Barstool sports-betting app. The app is operational in 10 states from Arizona to New Jersey.
On Monday during its gaming commission meeting, New York will likely license at least two platform operators with multiple sportsbooks to offer sports betting in the state. An agenda for the meeting was posted Thursday. State officials hope to have mobile sports betting up and running in time for the Super Bowl in early 2022.
One group in line to provide online sports betting includes Bally Bet, BetMGM New York, DraftKings New York and FanDuel New York, according to the New York Post. A second group includes Caesars, Wynn Interactive, Empire Resorts, PointsBet and BetRivers New York, the newspaper reported, citing an unnamed source.