By Forum Staff
State collections from the taxes on mobile sports betting totaled $727.4 million in State Fiscal Year (SFY) 2022-2023 and have continued to grow in the first quarter of the current fiscal year, according to a report by State Comptroller Thomas P. DiNapoli. With the legalization of mobile sports betting, the New York State Gaming Commission noted a 26% increase in problem gambling-related calls to the Office of Addiction Services and Supports (OASAS) from 2021 to 2022.
From SFY 2011-12 to 2022-23, state revenues from lottery sales and taxes on gaming revenues increased by 69.5%, growing from $2.8 billion to $4.8 billion. The increase is primarily from the implementation of new forms of gaming rather than from increased consumption of existing ones. New York is now among eight states that offer the most forms of gaming nationwide.
State revenues from video lottery terminal (VLT) facilities, casinos, and tribal-state compacts in SFY 2020-21 were less than half of those collected in SFY 2019-20 due in large part to gaming facilities being closed for five months because of the COVID-19 pandemic. Two years later, collections from the taxes on gaming revenues of the commercial casinos have yet to return to SFY 2019-20 levels. In addition, New York’s gaming industry has not recovered from 2020 losses of approximately 3,400 jobs. Employment in 2022 was nearly 20% lower than its pre-pandemic level.
In SFY 2022-23, the state’s $4.8 billion in gaming revenues comprised 3.6% of total state operating funds spending. While nearly 95% of the revenues were used for education purposes, they averaged just over one dollar of every eight state dollars spent on education over the past 12 years.
Mobile sports betting in New York was authorized in the SFY 2021-22 Enacted Budget and went live in January 2022. With a tax rate of 51% on gross gaming revenues, New York joins Rhode Island and New Hampshire in levying the highest rate in the nation. In SFY 2021-22, mobile sports betting generated $360.7 million for the state, far more than the $99 million initially projected. The $727.4 million in collections for the first full year of mobile sports betting in SFY 2022-23 was double the projection of $357 million. The higher collections were due primarily to the number of licenses issued to mobile sports wagering providers and the higher tax rate imposed subsequent to initial projections. Revenues in the first quarter of the current fiscal year have continued to grow, although the state Division of the Budget projects collections will level out, increasing by 6.9% over the next four fiscal years.
Since DiNapoli’s 2020 gaming report, OASAS spending on problem gambling services has increased from about $5.7 million in SFY 2019-20 to over $9.6 million in SFY 2022-23, according to OASAS testimony to the state Legislature.
The legislation authorizing mobile sports betting required 1% (about $1.6 million) of the tax on mobile sports betting revenues to be set aside for problem gambling services in SFY 2021-22. For each successive state fiscal year, problem gambling services will receive $6 million from those revenues.
Research indicates higher rates of gambling problems occur among individuals wagering with a mobile device, enabled by the accessibility, privacy and ease of smartphone use.
