Updates in the Gambling Industry: Tax Rate Changes, DraftKings’ Leadership in New York, and Other News
Ohio doubles bookmaker tax rate six months after legalization
The US Senate of Ohio amended the state budget, including amendments to double the tax rate for bookmakers – from 10% to 20%. Since February, Gov. Mike Devine has been lobbying for an increase in the tax rate. At the same time, gambling in Ohio was legalized only in January, a month before the start of talks about increasing taxes. There are currently 18 legal gaming venues in the state including major operators such as BetMGM, Caesars, DraftKings and FanDuel.
Since its launch in January, Ohio’s sports betting market has generated more than $507 million in taxable income. The total state budget collection at the rate of 10% was just over $50 million.
After the introduction of the new tax rate, the state expects to receive additional tax revenue in the amount of $100 to $135 million per year.
DraftKings overtakes FanDuel to become New York’s top bidder
DraftKings surpassed FanDuel in New York sports betting volume for the first time, handling $488.5 million in June betting, representing 42% of all mobile betting in the state. Compared to June 2022, the number of players at DraftKings has increased by 81%, according to the latest figures released by the New York State Gaming Commission. Analysts point to DraftKings’ strong performance in New York as one of the key factors behind the company’s recent stock market performance. On the other hand, FanDuel experienced a decline in handling from the previous year.
In June, the company recorded a total turnover in New York of $418.1 million, down 13% from June 2022 and down 34% from the previous month. FanDuel now owns 36% of the market, second only to DraftKings. Caesars was the only other online sports betting operator to achieve double-digit market share.
In June, Caesars bought back an 11% stake for $124.8 million.
New York sports betting volume earned $25 billion in record time
The size of the sports betting market in New York has reached $25 billion in the 16 months since the legalization of the betting industry in the state. This is a record for the time spent to achieve this amount of $25 billion. The previous record was held by New Jersey where it took 47 months to achieve this volume.
As of June 2023, the state has collected $983.5 million in taxes from the betting industry – the tax rate for bookmakers is 51% of adjusted gross gaming revenue, the highest rate in the US. The New York market leaders were DraftKings and FanDuel which held the top spot in betting volume for almost 80 weeks before DraftKings overtook them in June. Together, they account for almost 75% of the market share in the state.
The Polistina law allowing online gaming until 2028 came into force on July 10
A bill sponsored by Senator Vince Polistina has been signed into law that supports and expands the use of online gambling in casinos until 2028. Senator Vince Polistina’s bill which supports and expands the use of online gambling in casinos through 2028 has been signed. “I am delighted that this legislation has been signed into law to support the continued growth and success of casinos across New Jersey. Increasing the use of online gambling in casinos will keep New Jersey at the forefront of the emerging gambling industry,” Polistina said.
“The legalization of online gambling and sports betting has revitalized casinos in places like Atlantic City and created a number of well-paying jobs in the wake of the Great Recession. This authorization extends the use of online gaming services until 2028 to ensure stability in the gambling industry.” Online casino gambling was legalized in 2013 and was initially allowed for a ten-year period that was due to expire in November of this year. In the ten years since its legalization, online gambling has contributed to significant economic growth, job creation, and the enjoyment of responsible gambling by New Jersey residents and tourists.
Senator Polistina’s bill, A-2190/S-3075, amends the existing permit to extend it for an additional five-year period, which now ends in 2028. “Internet gaming is a strong economic engine for the industry. In the ten years since the legalization of online games, the state has brought millions of dollars in tax revenue,” Polistina added. “This expansion supports the integral role that online gambling plays in shaping the current and future success of casinos in New Jersey.”
New wave of penalties announced in Pennsylvania
This week, the Pennsylvania Gaming Control Board announced that it has imposed a new series of fines on casinos and bookmakers in the state for gambling violations. Harrah’s Philadelphia Casino and Racetrack was fined $35,000 for allowing underage players to gamble in the hall. Sports betting group SportsHub was found to have changed who controls its license without regulatory approval and was therefore fined $13,000.
Various players in the state were also added to Pennsylvania’s forced elimination list for leaving children in vehicles to play. Interestingly, two employees from Harrah’s Philadelphia Casino and Racetrack left a child in their car to get into the casino’s human resources department and casino dealer school. Leaving children unsupervised in a vehicle to gamble is a crime in Pennsylvania and, in addition to being a criminal offense, will result in the loss of players’ ability to gamble in Keystone.
There were 370 reported cases in the state last year of adults leaving children in vehicles to gamble, and the number is likely higher given that not all cases are reported.
