New York Daily Fantasy Sports Drove $3m in Tax Revenue

The abundant tax revenue of daily fantasy sports (DFS) that pundits claimed would materialize has turned out to be a fallacy. The Daily Star reported that the state of New York collected $3 million from DFS companies last year. According to Gary Pretlow, chairman of the Assembly’s Committee on Racing and Wagering, the New York state had expected to collect more from the industry than they did.

Pretlow also stated on Wednesday, during the public hearing on the impact of the state’s DFS law,

“But $3 million is better than no million.”

In attendance were Peter Schoenke, the chairman of the Fantasy Sports Trade Association, the government affairs counsel for DraftKings Griffin Finan, CEO of Boom Fantasy Steve Murphy and Ari Borod, vice president for legal affairs at FanDuel.

When the disappointing news of the tax revenue was raised during the hearing, the disgruntled DFS executives expounded on how the state could raise more taxes from the industry. Borod proclaimed that the current law does not permit DFS companies to expand their business as the companies are limited to the number of games that is available for offer. Borod said,

“Players ask, ‘why can’t we play golf and soccer contests on FanDuel?”

The executives at FanDuel stated that players want DFS companies to offer fantasy golf and football. The laws in the state of New York prohibits DFS companies from manufacturing such products.

Schoenke supported the notion that the state should permit real-time fantasy wagering to enable fan betting while the games are in play. The DFS bill was enacted in 2016 by the city of New York when Attorney General Eric T. Schneiderman ceased industry operations, as he believed the industry was promoting gambling. The law of the New York state classified DFS as a game of skill and not a game of chance. When the law was passed, it was signed by New York Governor Andrew Cuomo. Since then, the New York Gaming Commission has issued more than 15 temporary operating permits to different companies. The DFS companies will be more lucrative once the state of New York changes the law.

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