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How States Tax Sports Betting: A Comparative Analysis
Written by Alex Rockoff
When it comes to sports betting, taxes play a crucial role in shaping the industry. In May 2018, the Supreme Court invalidated The Professional and Amateur Sports Protection Act (PASPA), a federal law enacted in 1992 restricting sports betting in most states. This ruling allowed individual states to legalize and regulate sports betting within their borders. Since then, 38 states have allowed sports betting, and 29 of those states have permitted online wagering. Each state has its own approach to taxing sports betting revenue for operators, resulting in a diverse landscape. Keep in mind that the tax rates differ for retail sports betting, but this article will focus on the key points for mobile and online sports wagering.
Taxing Sports Betting Revenue by State
New York: The Empire State boasts the highest tax rate for sports betting revenue at an eye-popping 51% on gross gaming revenues. In addition, each operator must pay a one-time $25 million license fee. Despite operators’ struggles to turn a profit under this hefty taxation, New York’s robust population and sports enthusiasm contribute to its impressive tax revenue generation of approximately $1.46 billion since legalization in January 2022.
Pennsylvania: Following closely behind, Pennsylvania requires a one-time license fee of $10 million with a $250,000 renewal every five years. The state levies a tax rate of ...
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