New York’s 51% Sports Betting Tax Is Finally Under Real Fire — What a Rate Cut Would Mean for Bettors

New York has the most lucrative sports betting market in the United States. It also has the highest tax rate in the country, a 51 percent levy on gross gaming revenue that has squeezed operators, suppressed promotions, and left bettors in the Empire State with a noticeably worse product than their counterparts in neighboring New Jersey or Massachusetts. A bipartisan push to fix that is now gaining real traction in Albany, and the implications for New York bettors are significant.

The 51 Percent Problem

When New York launched mobile sports betting in January 2022, it did so with a tax structure that immediately drew concern from every major operator in the market. At 51 percent of gross gaming revenue, New York’s rate was roughly double what most other states charged. The state collected over $1 billion in sports betting tax revenue in 2024 alone, and the market handled $22.7 billion in wagers — numbers that look impressive on paper but tell an incomplete story.

Behind those headlines, FanDuel president Christian Genetski and DraftKings CEO Jason Robins have both warned lawmakers that the 51 percent rate is structurally unsustainable. Robins testified before a joint legislative hearing that the effective tax rate, when promotional credits are excluded from taxable revenue, exceeded 70 percent in some periods. The practical result has been stark: operators have invested 50 percent less in the New York market than in comparable states, offered fewer promotions, and in some cases maintained odds that are less competitive than what the same platforms offer in lower-tax states. New York bettors have been paying for the state’s tax appetite with worse value on every bet they place.

Assembly Bill A6013 and the Case for a Cut

Assemblywoman Carrie Woerner, chair of the Assembly Racing and Wagering Committee, has put forward Assembly Bill A6013, the most serious attempt yet to restructure New York’s sports betting tax. The bill proposes a sliding scale tied to the number of licensed operators in the state. Under the framework, the rate would drop to 35 percent once New York reaches 13 to 14 licensed operators, and fall further to 25 percent once 15 or more operators are active. The state currently has nine licensed mobile sportsbooks.

Woerner’s bill would also expand the number of available licenses from nine to 16 by January 2027, requiring at least 14 operators to be live by early 2026. New entrants would pay a $50 million licensing fee, creating a significant revenue stream for the state even as the ongoing tax rate falls. Potential new entrants to the New York market include bet365, Hard Rock Bet, and several other operators that have been priced out by the current regime.

The bill has had a difficult path through committee and has not yet moved to a floor vote. Some legislators have pushed back, arguing that operators knew the 51 percent rate when they applied for licenses and that the state has no obligation to renegotiate. Senator Joseph Addabbo, a Democrat who chairs the Senate Racing, Gaming and Wagering Committee, has historically been skeptical of operator arguments about unsustainability while the market continues producing record handle. That tension is real, and the bill’s ultimate fate in the 2025-2026 session is not guaranteed.

What Bettors Would Actually Gain

The argument for a tax cut is not primarily about helping billion-dollar corporations. It is about what those companies would do differently in a more rational tax environment, and the answer matters directly to every bettor who opens a sportsbook app in New York.

When operators are paying 51 cents of every dollar of gross revenue to the state, the money to fund competitive odds, generous promotions, and innovative bet types has to come from somewhere. It comes from bettors. Reduced odds, smaller bonuses, fewer same-game parlay markets, and a slower rollout of features like live micro-betting are all downstream effects of a tax rate that makes New York a break-even market at best for most operators.

If the rate dropped to 35 percent — the threshold that would kick in with 13 to 14 operators — FanDuel and DraftKings executives have indicated they would significantly increase promotional investment in the state. Robins was explicit in testimony: DraftKings would offer a materially better value proposition for New York customers. That means larger sign-up bonuses, more consistent odds boosts, and deeper markets on every game. For casual bettors, the difference between a 51 percent and a 35 percent tax environment is real money over the course of a season.

The Bigger Picture for the US Betting Market

New York’s tax debate is unfolding against a national backdrop that is moving in the opposite direction. New Jersey has proposed raising its online sports betting tax from 13 percent to 25 percent. Ohio is considering doubling its rate from 20 to 40 percent. Illinois already implemented a progressive tax in 2024 that has top-tier operators paying 40 percent. The pressure to extract more revenue from a booming industry is real and widespread.

That makes New York’s potential tax cut a genuinely countercyclical move — one that could strengthen the state’s market even as competitors weaken theirs. If operators are forced to reduce their New York footprint while building out in lower-tax states, New York bettors will feel the consequences in their apps every day.

The bill still has ground to cover before it becomes law, and Albany’s legislative process is rarely fast or predictable. But the conversation has shifted. New York’s 51 percent tax is no longer treated as sacred, and the case for reform is getting harder to dismiss. For the millions of bettors who open sportsbook apps every week in the Empire State, that shift cannot come soon enough.