The Big Gamble: New York’s Emergence as a Power Player in Casino Tax Revenue

In 2022, the United States’ commercial casino tax revenue landscape underwent a significant transformation.

In 2022, the United States’ commercial casino tax revenue landscape underwent a significant transformation. States like Pennsylvania, New York, and Nevada became focal points of this change. Pennsylvania led with an astonishing $2.21 billion in tax revenue. New York, not far behind, secured its position as the second-largest contributor with approximately $1.83 billion, overshadowing Nevada’s traditional gambling dominance, which collected around $1.15 billion.

This shift not only highlights the expanding gambling industry’s influence on state economies but also marks a pivotal moment in the redistribution of economic benefits derived from gambling, positioning New York as a key player in the national gambling revenue landscape.

New York imposes one of the highest taxation rates on gambling in the country, with a 51% tax on the revenues of gambling operators, surpassing all other states in the US.

The disparity in tax rates among states offers a revealing glimpse into their gambling revenue dynamics. New York and Pennsylvania’s impressive tax revenue is attributed to its 51% and 24% tax rate, in stark contrast to Nevada’s more modest 9%.

When we examine other nations, our attention turns to Brazil, which has recently enacted legislation to regulate casinos. This move, anticipated to yield more than $2 billion each year, signifies an increasing awareness of the economic benefits offered by regulated gambling. A uniform tax rate of 15% has been established across all states, positioning this rate as relatively moderate, nestled between those of Nevada and Pennsylvania.

Andreas Bardun, CEO of KTO, one of Brazil’s largest casino, commented on the legislation, stating:

”KTO is excited to announce that the long-awaited regulation of the Brazilian market for online sportsbooks and casinos has been successfully implemented. This milestone reflects a well-executed regulatory framework that effectively addresses key concerns within the industry. We are extremely pleased with the outcome and commend the authorities for their diligent efforts in achieving this. [...]”

The evolution of casino tax revenue in the United States, particularly with New York’s emergence as the second-largest contributor, signifies a transformative period in the national gambling industry. With its 51% tax rate on gambling revenues—the highest in the country—New York stands at the brink of an unprecedented opportunity. This aggressive taxation strategy not only highlights the state’s potential for generating substantial public funds but also sets a precedent for harnessing the gambling sector’s economic benefits.

The varying tax rates across states like New York, Pennsylvania, and Nevada, and countries such as Brazil, reflect diverse strategies to capitalize on the lucrative gambling sector. These developments underscore the critical role of legislative frameworks and taxation policies in shaping the economic landscapes of gambling.

As states and nations continue to adapt and refine their approaches, the gambling industry’s contribution to public coffers is likely to evolve further, offering new opportunities and challenges alike. This new era beyond Nevada’s long-standing dominance heralds a broader recognition of gambling’s economic potential, setting the stage for future growth and innovation within the industry.