DraftKings Gets Slice of Big Apple Pie
Ayse Bayram
Finance Writer
New Yorkers will finally be able to enjoy mobile betting.
Back in the spring of 2021, the New York State Gaming Commission announced that online betting platforms would operate before SuperBowl LVI in February 2022.
Nine operators, among them DraftKings, were given approvals for licenses to begin their operation as soon as servers and equipment were tested. Other big names that also received licenses include BetMGM, FanDuel, Caesars, and others. Those who did not make the list include Fanatics, who will not operate in New York until they receive approval.
DraftKings has recently announced a partnership with Boot Hill Casino & Resort, known for its electronic gaming machines. With this partnership, DraftKings will be able to expand its platform into Kansas and New York.
The decision to overturn the rule of restricting bets to in-person will trigger an expansion of sports betting. Prior to the change, if one wanted to place a sports bet, they would have to travel upstate to one of the four casinos. The reverse will grow the market exponentially as more individuals will be able to place sports bets easily.
With 90% of New Jersey’s sports bets made online, New York’s decision to expand public betting is no surprise. New York State was hit during COVID-19 as strict regulations forced businesses to shut down for the past two years. This decision will expand the budget of the state.
The Gaming Commission announced that all profits made on online sports bets will be taxed 51%. Compared to other states, New York’s decision imposes the highest tax.
The high tax can influence New Yorkers who wish to bet. A study shows that roughly 20% of New Jersey’s sports wagers belong to New Yorkers crossing the border. Thus, a high tax may deter individuals from using New York platforms and turning to New Jersey wagers.
New York’s decision can prove to be beneficial as another way to increase the state’s budget. Moreover, it comes at a perfect time, just as businesses are reopening.
But if the taxes on the profits made continue to stay as high as they are now, it may discourage individuals from entering online gambling. On the other hand, once the taxes can reach a point where gamblers do not have to give up more than half of their gains, the online gambling market can then flourish in New York.
Contact Ayse at bayramay@shu.edu