In the three years since New York legalized mobile sports wagering, nearly $58 billion in bets have been placed in the state, according to the state Gaming Commission.
New York operators now bring in the most sports betting revenue of those in any state by a wide margin, according to the American Gaming Association, and state budget officials expect the industry to keep growing. (Other large states like Texas and California have declined to legalize mobile sports betting.)
Sports betting makes up nearly one-fifth of the state’s total gambling revenue; the rest comes from casinos, horse racing, and the lottery. (New York’s lottery, the biggest in the country, brought in $8.2 billion in sales during the 2023-2024 fiscal year; mobile sports betting brought in 1.7 billion in revenue.)
Industry proponents claim it has been a boon for the state’s public schools — which receive most of the gambling industry’s tax revenue — although education experts say that funding levels for education aren’t directly tied to the amount of sports betting revenue coming in.
Meanwhile, the convenience of mobile betting may exacerbate addictive gambling behaviors and a growing body of research has found that legalization may be contributing to rising consumer debt and bankruptcies.
How did we get here?
Betting on sports was largely illegal in the United States under a decades-old federal law that was struck down by the US Supreme Court in 2018. (That ban had exemptions, including for horse racing.)
Since then, 38 states have legalized the practice; mobile betting is legal in 30 of them, including New York as of 2022.
The industry grew rapidly here, hitting a record of more than $2.3 billion of mobile bets placed in October 2024.
The state takes a big cut of that. New York taxes operators’ online sports betting revenue at 51 percent, the highest rate in the country (matched by Rhode Island and New Hampshire). Industry revenue has repeatedly exceeded state forecasts, and the state Division of the Budget expects it to continue growing.
What does the state do with its sports betting revenue?
The taxes the state collects on all forms of gambling, including sports bets and the lottery, largely go to fund public schools. That revenue comprises about 15 percent of the state’s aid to schools.
Mobile sports betting in particular provided nearly $2.6 billion to the state’s education system between January 2022 and December 2024, according to the latest data from the state Gaming Commission, which oversees the gambling industry.
That revenue may not increase the state’s total education budget, though the gambling industry has touted its benefits to schools when pushing for legislation expanding legalized wagering.
“The legislature and the governor decide on the school aid number first,” said Brian Cechnicki, executive director of the Association of School Business Officials and former director of education finance for the state Department of Education. The gaming revenue replaces what the state would have otherwise contributed from its general fund, he said.
Still, state officials have supported using extra gambling revenue to increase total school funding in recent years, Cecnicki noted. State revenue from lottery sales and gambling taxes has increased by about 70 percent over the past decade.
At what cost?
As the industry has grown rapidly nationwide, politicians and advocates are increasingly concerned about the addiction and debt that can accompany the activity.
Early research has suggested large costs to legalization, including a 28 percent jump in bankruptcies, a 14 percent drop in household investment, and an increase in domestic violence after home team losses.
The National Council on Problem Gambling warns that mobile betting can increase the risk of problematic gambling by making it so easily available. And the legalization of sports betting has been linked to a sharp uptick in calls to addiction hotlines.
New York’s “gambling HOPEline” reported a 26 percent increase in calls in the state’s first year of mobile sports betting. The state sets aside a small fraction of sports betting revenue for “problem gambling” education and treatment.
When the national ban on sports betting was first lifted, traditional casinos and fantasy sports platforms like DraftKings and FanDuel competed for customers with aggressive marketing that drew criticism for targeting underage fans, including college students. Operators offer enticing promotions to “recruit” people, said Jim Maney, executive director of the New York Council on Problem Gambling, a nonprofit that receives funding from the state to raise awareness and advocate for prevention and treatment services.
“We’re neutral about gambling, but we’re definitely not neutral about advertising,” said Maney. “We see all the celebrities promoting it, but we don’t hear anything about the other side of it.” His group has advocated for more advertising about the risks of gambling.
In October, Governor Kathy Hochul signed legislation requiring sports betting ads to include warnings about addiction. The Gaming Commission previously enacted rules preventing sports betting companies from advertising in college newspapers or targeting advertisements to campuses. (People must be at least 21 years old to legally place bets.)
What’s next?
While mobile sports betting is still on the rise here, experts note it may be something of a trojan horse for the industry’s big bet: “iGaming,” essentially an online casino. Not only would you be able to place sports bets on your phone, but you could play slots, blackjack, and more.
Joseph Addabbo, the industry-friendly chair of the state Senate Committee on Racing, Gaming, and Wagering, has been championing legislation to legalize iGaming. The internet casino revenue could “blow the numbers from sports betting out of the water,” Addabbo said at a 2022 industry conference.
“Mobile sports betting became so successful, why not replicate that with iGaming?” Addabbo told New York Focus. “We can use the funding for practically anything. It could be used for transportation, it could be used for the MTA,” he said, referring to the budget gap the transportation agency is currently facing.
To date, Hochul has not backed the idea, which has been opposed by the Hotel and Gaming Trades Council, the union that represents casino workers and warns that iGaming would be a job killer.