A recent meeting of the New York Senate Racing, Wagering, and Casino Committee turned into a gripefest by big-time operators like DraftKings and FanDuel. The operators strayed from the meeting’s agenda with extended complaints about the state’s sky-high 51 percent tax, and threatened to take out their feelings on consumers with threats of increased juice.
Tuesday’s meeting started out on an up-note with testimony from the Executive Director of the New York State Gaming Commission Robert Williams. Williams spoke glowingly of the $16 billion in wagers and $700 million in tax revenue that have come in over the past year.
The mood in the room changed dramatically when DraftKings CEO Jason Robins and FanDuel President Christian Genetski gave their own testimony. Both executives took the opportunity to complain bitterly about New York’s tax scheme, while threatening to pass their troubles along to consumers in the form of increased juice and decreased promotional bets.
Genetski summed up the operator’s mood during his testimony saying, “We do not believe that this level of economic success is sustainable with the current tax rate of 51%. Although it’s only been one year since the market launched, there are clear signs that the New York market has already peaked, whereas other states remain on a solidly upward trajectory.”
Robins added that because the State doesn’t allow them to write off promotional bets, the actual tax for Empire State operators was “north of 70 percent”. He apparently didn’t have enough time to reflect on how suggesting that taxpayers pay for his promotional costs is a bad look.
Committee Chair Sen. Joseph Addabbo was particularly unimpressed with the operators and their sob stories saying, “Everybody on the planet knew that (tax rates were high). There was no sunset, so you knew it was 51 percent going forward. You negotiated it. You agreed to it. And now we have these numbers, and there’s no real foundation to say these numbers are suffering at this point.”
Assemblyman and Co-Committee Chair Gary Pretlow pointed out that the operator’s threat to add juice to wagers to make up for the high tax rate sounded like collusion, and threatened legal action.
While New York does have the highest sports betting tax scheme in the country, it’s unlikely that threatening to gouge consumers is an effective strategy for tax relief.