New York generates nearly 37% of all US sports betting tax revenue, according to study

New York accounted for more than 37% of the total tax revenue generated nationwide from sports betting, according to a study released by the US Census Bureau.

The Quarterly Survey of State and Local Tax Revenue (QTAX), which recently added sports betting to its list of tax sources, revealed that sports wagering amassed just under $506 million in national tax and gross receipts in the third quarter of 2023. This was 20.5% higher than in Q3 2022 but much lower than $571.5 million in Q2 2023.

Notably, New York stood out with $188.5 million in tax revenue, nearly five times higher than the second-ranking state, Indiana, which brought in $38.6 million. Ohio, Illinois and Pennsylvania rounded out the top five states with $32.9 million, $32.4 million and $28.8 million in tax collections, respectively.

At 51%, New York has the highest tax rate on gross gambling revenues among all states that have legalized sports betting.

Momentum is far from over. Last week, New York announced it set a new online sports betting record with January revenue reaching $211.5 million, marking a 12.3% increase from the previous record of $188.3 million set in December 2023. Year-on-year, it was up 41.6% from $149.4 million reported in January 2023.

This accomplishment establishes the Empire State as the unparalleled leader in sports betting. It surpasses the previous revenue record set by Ohio in January 2023, marking New York and Ohio as the only states to exceed $200 million in monthly revenue since the post-PASPA era began in May 2018.

Leading the charge in the Empire State's online betting landscape is Flutter Entertainment's FanDuel, which reported a record-breaking online revenue of $109.2 million in January, the highest amount ever posted by a single operator.

Going forward, the Empire State is set to add a new major player to its market. Last Tuesday, PENN Entertainment said it has reached an agreement with Wynn Interactive Holdings to acquire its New York mobile sports wagering licenses, providing Penn with market access to the jurisdiction. Pending regulatory approvals, Penn will launch its online sports wagering platform ESPN BET in New York later in 2024.

Despite New York's triumphs in sports betting, iGaming continues to be absent in the market. State Governor Kathy Hochul's recent executive budget for 2025 omitted plans for online casino, dealing a blow to those campaigning for the vertical in the state. State Senator Joseph Addabbo's revised iGaming bill, aiming to inject additional tax revenues into the state's coffers, failed to gain traction.