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SportsTranscript
00:00 Let's start off with the sports betting tax rate in New York, which is, you know, certainly been the barometer for a lot of other states here in the country.
00:08 We're seeing a lot of other states want to be where New York is, which is at that 51 percent.
00:13 I guess, you know, that's come under, I guess, some scrutiny from the sports betting operators because they think it's too much.
00:19 The state thinks it's just right.
00:20 Other states want to follow the suit in New York.
00:23 Do you think that this ends up coming to fruition for these other states?
00:27 And do you think New York has simply just set the bar for everybody wants to be?
00:30 Yeah, it's a good question, really, and, you know, I think a little bit remains to be seen where some of these states will go.
00:40 We've already seen Ohio increase their tax rate.
00:44 They doubled it from from 10 percent to 20 percent within the first couple of months after legalizing sports betting.
00:52 We saw that happen last year.
00:54 New Jersey currently discussing in their state legislature increasing the sports betting tax rate.
01:00 And Illinois is doing the same thing.
01:05 And I thought it was an interesting time to to reach out to some people that that worked in New York state government as these early sports betting conversations were going on.
01:17 And just to kind of get a sense of the challenges around adjusting tax policy kind of after the fact.
01:25 Right. I think we see a lot of these lawmakers kind of looking at New York and its 51 percent tax rate and seeing just how much money the state is making from sports betting right now and kind of feeling like perhaps maybe they left a little bit of money on the table.
01:42 So I spoke to Rich Azapardi, who is Governor Cuomo here in New York, Governor Cuomo's senior advisor in the last couple of years of that administration.
01:54 And he was intimately involved in those sports betting conversations as regulators and the operators were kind of talking back and forth trying to figure out this tax rate.
02:07 And they ultimately settled on 51 percent. And he told me that they were kind of agnostic towards sports betting as a whole.
02:15 They kind of figured that it was coming. But once the covid-19 pandemic happened and the state was was feeling a little bit of a fiscal crisis, they really needed something to to drive more revenue and kind of help them balance that budget and kind of clear a couple of financial gaps.
02:35 So sports betting, in their view, was was one of the more palatable options.
02:41 And that 51 percent tax rate, he told me, came from the state budget department just really saying, what's it going to take for for it to be worth it for the state?
02:52 And that's kind of where they settled.
02:53 And ultimately, he told me, too, that the operators had no choice in agreeing to it.
02:59 They knew that New York was going to be a huge market, like we've talked about for the last several months, Craig, just month after month after month.
03:08 Big numbers in terms of overall betting handle, big numbers in terms of operator revenue and therefore state tax revenue.
03:16 So, Rich, as a party was telling me that these operators really had no choice.
03:22 They've gone in front of the legislature in recent years and said that this tax rate, 51 percent, is unsustainable and perhaps that in the future they'll have to make the odds on certain bets a little bit less advantageous for better, more advantageous for the operators.
03:44 To date, though, those threats seem to be a bit hollow as we have not seen that sort of happening in New York yet.
03:54 But I thought it was an interesting time to talk to the former administration here in New York when all of that stuff was legalizing, like I said off the top.
04:04 Illinois currently discussing increasing their tax rate.
04:07 New Jersey discussing it as well.
04:09 So we'll see how those legislatures kind of handle the issue of tax policy around sports betting, like you said, to kind of using New York as a guide here over the last couple of years.