Online Sports Betting Becomes New York's Second-Largest Gaming Revenue Source

Online sports betting has emerged as a significant revenue generator for New York State, becoming its second-largest source of gaming income and collecting over $1 billion annually in taxes, according to a report released Wednesday by State Comptroller Tom DiNapoli. This revenue stream trails only the state lottery.

The substantial increase in gaming revenues over the past few years is almost entirely attributable to mobile sports betting, which launched in January 2022. In contrast, revenues from other forms of gambling have either declined or remained stagnant. The report indicates that overall gaming revenues have grown by 32.7 percent over the past decade, driven predominantly by mobile sports wagering collections. Meanwhile, revenues from all other gaming sectors have collectively decreased by 0.8 percent.

Collections from the 51% tax on gross gaming revenue from sports betting saw a 78% increase between fiscal year 2023 and fiscal year 2026, rising from $727.4 million to $1.3 billion. Since its launch, mobile sports betting has generated $8.3 billion in tax revenue for the state from a total of $91.2 billion in wagers placed. Approximately 7.2 million unique mobile sports wagering accounts were active in New York last year, with the majority of bettors aged 21 to 44. In 2025, more than 2 million transactions were processed on mobile sports wagering platforms, with an average wager of $3,500.

Basketball, football, baseball, tennis, and soccer account for over 90 percent of all mobile sports bets. Betting activity often spikes during major sporting events such as the Major League Baseball World Series, the National Football League Super Bowl, and the National Collegiate Athletic Association Basketball Tournament.

The report also noted instances of volatility, such as the 2026 NBA Finals where the New York Knicks' championship run led to bettors winning significantly. During the finals, over $1 billion in mobile sports wagers were made, but the gross gaming revenue reflected a net loss of $14.4 million because winning payouts exceeded received wagers. This illustrates how substantial winning bets at high odds can reduce gross gaming revenues and, consequently, state tax collections from those revenues.

New York State offers six types of gambling: horse racing, the lottery, slot machines (video lottery terminals), commercial and tribal casinos, mobile and retail sports betting, and interactive fantasy sports. Lottery games, including Powerball, accounted for 47.3 percent of all gambling revenues last year. The growth of mobile sports betting has occurred while in-person sports wagering at the state's commercial casinos, taxed at a lower 10% rate, has generated only $69 million since 2019, less than 1% of the revenue from mobile wagering.

Additionally, the report highlighted the rise of less regulated prediction markets, with a significant portion of trading focused on sporting events. The potential impact of these markets on state revenues from mobile sports wagering remains unknown, but their growth could pose a risk. Platforms like Kalshi and Polymarket facilitate these prediction markets, and future state revenues may be affected by litigation concerning the regulation of these markets by state and federal governments.