Gov. Kathy Hochul’s state executive budget for fiscal year 2024 projects online NY sports betting to produce $896 million in tax revenues for educational funding.
That staggering projection equates to about $75 million per month, and comes a day after DraftKings and FanDuel asked state legislators for an online New York sports betting tax reduction from 51% to 35%.
DraftKings CEO Jason Robins said the company could be “forced” to offer worse odds and fewer promotions to New York bettors if the rate remains the same as the one sportsbooks agreed to offer just a year ago.
Based on the lofty goal, however, it appears that the governor is not planning on the sportsbook request being granted.
Shooting for $1 billion in NY sports betting?
The $896 million projection for FY2024 marks a sizable 45.7% increase year over year from $615 million in FY2023.
NY online sports betting produced $709 million during is first full year of operation (Jan. 8, 2022 to Jan. 7, 2023). Gov. Andrew Cuomo’s initial projections had the state making $500 million annually from online sports betting.
So far in FY2023 (April 1, 2022 to March 31, 2023), the state is at $530 million with three months remaining.
State explanation for projection
As per the state financing plan:
“The amount of school aid spending financed by mobile sports wagering receipts is expected to increase significantly in FY 2024 due to higher than anticipated revenue collections in FY 2023.”
NY sports betting keeps rolling
Operators have cut promos and marketing spend while complaining about the tax rate and their inability to create sustainable business.
Granted, they accepted the 51% tax rate in order to enter the robust market in the first place.
And regardless, the state is on pace to break its own monthly online sports betting handle record this January.
NY records across the board
Through Jan. 22, New York was at $1.3 billion. In Jan. 2022, the state came in at an all-time US high $1.7 billion.
New York also surpassed $70 million in monthly tax revenue from October-November 2022.
Online sports betting tax revenue projections then drop 27.7% to $648 million in FY2025. That is followed by $655 million in FY2026 and $659 million in FY2027.