The Double Down: What’s In A Tax Rate?

Double Down

The reels are always spinning in the gambling industry, and “The Double Down” is here every Friday to catch you up on all of the week’s biggest news. Sports Handle’s “Get a Grip” rounds up everything on the sports betting side, and US Bets provides the best of the rest: brick-and-mortar happenings, online casino developments, poker headlines, and more. So pull up a chair, crunch the numbers, and slide forward another stack of chips.

And you’re working for no one but me

There wasn’t much downtime between the biggest sports gambling event of the year and what figures to be the biggest gambling industry news story of the year. Some 72 hours after the Super Bowl ended, New York state Sen. Joseph Addabbo delivered on his promise to file a bill to legalize online casino in the Empire State.

If New York should pass the legislation, it will reshape the U.S. gambling business. Once other states catch wind of the windfall New York is enjoying, it’s farewell floodgates.

And the most notable story within the story concerns the tax rate proposed in Addabbo’s bill: 30.5%.

Believe it or not, that wouldn’t be the highest tax rate among states that have legalized iCasino. Pennsylvania has a mixed tax structure where online table games get taxed at 16% of revenue, while online slots revenue gets hammered to the tune of 54%.

Compared to all other states, however, New York’s proposed 30.5% is a moonshot. New Jersey’s tax rate is 15%. Connecticut’s is 18% for the first five years, then it goes up to 20% for the next five. Michigan has a tiered tax structure that varies depending on the amount of revenue, falling between 20-28%.

Maryland also presented an iCasino bill this week, with a modest tax rate of 15%.

These bills, with their wide disparity in tax rates, are hitting at the same time that Ohio’s governor is feeling like his state isn’t taxing sports betting aggressively enough, and he wants to double that rate midstream. It all begs the question of what is the right amount for a state to siphon from gambling to maximize its funds without making the operators’ business unsustainable.

The answer, of course, depends on the state. In New York, with more than 20 million residents, a tax rate double that of neighboring New Jersey figures not to scare many operators off.

But this is the story to watch within the story to watch: If New York legalizes online casino, other states will follow its lead. And if New York’s iCasino comes with a 30.5% tax rate, other states will at least entertain the possibility of following that lead too.

This week on Gamble On …

Every Thursday, US Bets drops a new episode of the Gamble On podcast, and this week’s welcomed Cipher Sports COO and co-founder Katie Prowd, who shared her thoughts on gender diversity in the gambling industry and what can be done to bring more female minds into the fold:

"I'm acutely aware of people's surprise when they find out what I do."
On the latest episode of #GambleOn, Cipher Sports COO and co-founder Katie Prowd talks about her experiences working in the male-dominated gambling industry:

— US Bets (@US_Bets) February 17, 2023

Money, money, money, money … money!

AGA Reports Record $60.4 Billion In Total Gaming Revenue For 2022

Garden variety standard-setting

New Jersey Sets Another Record For Single-Month Online Casino Revenue

Not kidding around

Michigan Group Takes Issue With Tribal Casinos Targeting Teen Gamblers

Everywhere you look, everywhere you go

Full House Resorts To Open Its ‘Temporary’ Casino In Illinois 

Good drafts, good deeds

Fantasy Cares Is Bringing Charity To Fantasy Sports, One League At A Time

Rocky Mountain retirement

Colorado Gaming Director Dan Hartman To Retire In May

Basque in the spotlight

In Key Rebranding, Magic City Jai Alai Is Now The World Jai Alai League 

Running with Da Bears

Bears Finalize Purchase Of Arlington Raceway From Churchill Downs

Petersburg vs. Richmond casino drama continues

A pair of Virginia bills that could have led to a casino being built in Petersburg were killed this week by the Senate Finance Committee. The legislation would have asked Petersburg voters if they wanted a casino in the city, while also blocking Richmond from holding another referendum this year after a 2022 effort there failed. The failure of the Petersburg bills opens up the door for Richmond to hold a 2023 referendum.

Also in the Commonwealth, the Virginia Lottery reported January casino revenue data this week, and the state received more than $3 million in taxes from casino gaming conducted at Hard Rock Bristol and Rivers Casino Portsmouth.

Hard Rock’s adjusted gaming revenue for the month was $13.4 million, while Rivers Casino’s was $9 million. Slots accounted for the heavy majority ($18.1 million) of the $22.4 million in adjusted gross revenue reported for the month. Rivers Casino opened on Jan. 23, so its data is only from one week of wagering.

— Bennett Conlin

Anaxi, BetMGM partner up

Aristocat Gaming’s real-money online casino games arm, Anaxi, and BetMGM announced a partnership on Thursday, bringing Anaxi’s portfolio of games to the BetMGM iCasino.

“We are honored to be the first operator in North America to offer Anaxi’s world-class content,” BetMGM Chief Revenue Officer Matt Prevost said in a release. “Partnering with Anaxi to provide some of Aristocrat’s most iconic games supports our goal of making BetMGM online casino the best destination for players.”

It was one year ago, in February 2022, that Aristrocrat announced it would be establishing this real-money division, and the “Anaxi” name was revealed in October.

— Eric Raskin

More from around the gaming biz

BAILING ON BALLY’S: Lee Fenton to exit as Bally’s CEO after less than 18 months in top job [EGR]

A GREY AREA IN COLORADO: Greyhound betting in Colorado is still a multimillion-dollar business — that might be about to change [Denver Post]

ANONYMOUS NO LONGER: California winner of $2.04 billion Powerball lottery jackpot revealed [Lottery Post]

BLONDE AMBITION: Do blondes have more fun? $50M nightlife venue coming to Strip [Las Vegas Review-Journal]

HAWKEYES ON THE PRIZE: Harrah’s Casino plotting $22 million expansion plan [1011 Now]

DEEP IN THE HEART: Editorial: 8 billion reasons to legalize gambling and sports betting in Texas [Houston Chronicle]

PROGRESSIVE MOVEMENT: Florida blackjack player hits progressive jackpot for $1.2 million-plus at Seminole Coconut Creek [CDC Gaming Reports]

Image: Blundell Design

The post The Double Down: What’s In A Tax Rate? appeared first on USBets.

Author: Ryan Gonzales