Legal Sports Betting PAC Drops $355K Into New York Legislative Race

Legal sports betting in New York has always carried a hefty price tag. But the Empire State’s sportsbooks have long desired both a reduction and an introduction of iGaming — and they might be spending to help make that happen.

A Political Action Committee (PAC) called New York Future has spent $355,000 to support Karen Hoak in the primary for the General Assembly seat in New York’s 149th District, according to WKBW in Buffalo, N.Y. New York Future lists Hoak as one of six candidates, all of them Democrats, whom it’s supporting in New York’s primary elections. Those take place on June 23.

Per WKBW, New York Future is funded by legal sports betting operators FanDuel and DraftKings. Both have contributed $2.25 million to the PAC, which goes a long way in state-level races. Currently, the Assembly has a stalled bill that would lower the tax rate for legal sports betting in New York, making a favorable political climate highly desirable to sportsbook operators.

Additionally, New York Future has sent mailers supporting state senators Joe Addabbo (D-Queens) and Toby Ann Stavisky (D-Queens). Both are known to support expanding legal sports betting and gambling in New York. Addabbo chairs the state senate Committee on Racing, Gaming and Wagering, and has introduced bills to bring iGaming to New York in three consecutive sessions.

But it’s Hoak’s presence that’s drawing the most attention. That’s because of how much New York Future has spent on that one race. The 149th District is in a highly Democratic part of Erie County, meaning the Democratic nominee will almost certainly win the November election.

Hoak, a deputy commissioner for highways in Erie County, is currently facing two rivals, attorney Adam Bojak and businessman Kevin Deese. According to WKBW, both say they were approached by supporters of expanding legal sports betting. Bojak said he rejected their overture, while Deese claimed to have taken the meeting without receiving support.

Why Are Legal Sports Betting Operators Getting Involved in New York Politics?

New York has had legal sports betting since January 2022. But at 51%, it carries the highest tax rate in the nation for sportsbook operators. Because New York is the largest state in the nation with legal sports betting, the largest sportsbooks reluctantly pay the rates. Smaller sportsbooks, however, haven’t entered the market because they can’t afford to do so.

Assembly Bill 6013 would change that. If passed, it would create a sliding scale for the state tax rate. The rate would drop depending on how many sportsbooks operate in New York. At 13 sportsbooks, the rate would fall to 35%, and at 15 or more, the rate would drop to 25%.

That would represent drastic savings for the biggest sportsbooks. Currently, neighboring New Jersey and Connecticut feature tax rates of 21% and 13.5%, respectively. That leads to greater profits for legal sports betting operators, which leads them to offer more favorable terms to bettors.

How Might iGaming Be Affected?

The state Senate, led by Addabbo, has focused more on bringing iGaming to New York. That bill, Senate Bill 2614, also sits in committee. New York has long been a target for iGaming, both because of its size and its neighbors. Currently, Connecticut, New Jersey and Pennsylvania all offer legal iGaming. Additionally, bettors can cross into Ontario, Canada, which also offers iGaming.

Addabbo’s bill would both bring iGaming to the Empire State and set a tax rate of 30% on profits. In both cases, that would entice new betting operators to enter the market.

How Have the Candidates Responded?

Hoak has stressed that her campaign has no connection with New York Future. Legally, campaigns cannot coordinate with PACs, and have no control over their messages. That hasn’t stopped Bojak and Deese from trying to tie her to the legal sports betting operators. Both seem to oppose gambling efforts, while Hoak has taken no official position.

Whichever candidate emerges will advance to the general election, which will take place on Nov. 3. They will face Republican Frank Bogulsky, an attorney from Buffalo. Based on the district’s history, the election is expected to be an easy Democratic victory.