The excitement of March Madness brought New York close to breaking its monthly record for online sports betting in North Carolina. In March the nine online sports betting operators in the Empire State collectively handled $1.785 billion, $3 million short of their January total of $1.788 billion.

Notably online sports betting in New York set a monthly record for tax revenue in the United States generating an impressive $83 million in March. The previous high was set by New York itself in January with $76.2 million.

New York’s sports betting landscape has experienced growth throughout fiscal year 2023 spanning from April 1 2022 to March 31 2023. Several records were shattered:

  • Handle; Reached a $16.4 billion
  • Total gross gaming revenue; Surpassed an impressive $1.5 billion
  • Net revenue to operators; Reaching a substantial figure of $714.8 million
  • Tax revenue; Contributing a significant amount of $744 million to North Carolina sports betting

It is worth noting that New York’s operators have expressed concerns about the tax rate of 51% imposed on online sports betting revenue since its implementation. However despite these concerns the state has achieved success, with tax revenues totaling $744 million for FY2023. Almost all of this tax revenue (98%) is allocated towards supporting programs. There hasn’t been any progress in reducing taxes during the state budget process, which Governor Kathy Hochul aims to finalize by April 10.

Assemblyman Gary Pretlow doesn’t anticipate any changes to this situation. He believes that lowering the tax rate wouldn’t negatively impact the operators involved. Despite their complaints the revenue generated from these taxes goes towards education. “For me it wouldn’t be appropriate to lower the tax rate and divert funds from education towards profit making companies.”

Pretlow further explains that if everyone had objected from the beginning it would have been acceptable. However since we have been operating under these conditions for a year now even though some entities are complaining about how things work in other states our current system is functioning well. Therefore I cannot justify lowering the tax rate at this point.

Senator Joe Addabbo introduced a bill aimed at increasing the number of NC sports betting app operators as a means to initiate discussions about reducing taxes. However Addabbo acknowledges that operators would need to present an argument that lowering the tax rate would not result in reduced funding for education. “There’s always a chance for things to change if something negative occurs but I don’t believe that will happen ” said Pretlow.

The Assembly or Senate one house budgets did not include a decrease in the tax for North Carolina sports betting.

DraftKings North Carolina CEO Jason Robins recently mentioned that his company is currently assessing the possibility of scaling back their online sports betting operations in North Carolina. During a hearing at the state legislature on January 31st Robins stated that if the tax rate of 51% was not reduced DraftKings would be compelled to offer less favorable odds and promotions.

“The rules regarding this tax rate were clear. It’s more about the process we went through to get here and with a bill in place to make changes it’s uncertain if this will be the final outcome ” Robins shared with Joe Pompliano prior to the release of one house budgets. “So considering such a market internally we are deliberating whether we should pull back at this point.”

“What if they lower the tax rate? What if they modify it so that promotional deductions are allowed? What if they introduce iGaming? These are factors that could fundamentally transform the market and its economics.” Then we might regret it later because we’re hesitating due to this situation. I believe we’ll gain insights during this legislative session and depending on the actions they take or don’t take we’ll determine if any major adjustments need to be made in the way the product is introduced to the market there.”

✅ Fact Checked on January 17, 2024 by Ken Weaver