Could Marijuana, Sports Betting Be Huge Windfall For New York If Legalized?

May 21, 2018 - 3:12 pm

NEW YORK (WCBS 880) -- New York political leadership at the city and state level has not exactly cozied up to the idea of legal marijuana and sports betting.

But with New Jersey and other neighboring states taking a look at the issues, push could come to shove. Sports betting could be a matter of weeks away in New Jersey, and Gov. Phil Murphy has been touting legalization of recreational marijuana there since he was campaigning for the seat.

Speaking to WCBS 880’s Paul Murnane Monday morning, Greg David of Crain’s noted that city Comptroller Scott Stringer recently said marijuana could bring a windfall for New York City and state.

"Legalizing marijuana could potentially create a $3.1 billion market in New York State and about a $1.1 billion market in New York City. We could also tax those dollars, providing up to $436 million in new state tax revenue and the city would reap an additional $336 million in taxes. That's larger than the budgets of some of our city agencies, it's money that could go to fund education programs, the drug opioid crisis, addiction treatment and community centered investments," Stringer said last week.

But David said those numbers might not come in right away.

“You know, we pretty well know what’s going to happen on the pot front because it’s been legal in Washington, legal in Colorado, and was legalized this year in California. So the numbers are big,” he said. “There’s one thing to remember – it takes a long time for the market to actually mature. California’s only going to get about $240 million this year, because it’s taking them a long time to develop the market.”

Legalized sports betting could bring in even more revenue for New York, David said.

“The overall business is at least $150 billion. That will produce a lot of income tax revenue for the federal government, but states could figure out ways to tax sports betting as well, and I saw a study which said it could be worth $3 billion across the country for sports betting,” he said. “Now, what you have to remember is New York’s going to be one of the biggest markets for sports betting, so we’re going to get, if we legalize it, we’re going to get a significant chunk of that money.”

But David cautioned that when it comes to both marijuana and sports betting, New York cannot put tax rates so high that people start spending their money in other states.

“That’s one of the problems that could be in California. If you set the tax revenue so high, people will just go buy in other places. As a matter of fact, the comptroller’s study pointed out that some people think 55 percent of the cigarettes smoked in New York are bootlegged in from other states, because New York’s taxes are so high,” he said. “So you have to set the tax revenue just right, and since Massachusetts has already legalized, and pretty clearly, New Jersey’s going to legalize this year, you’ve got to set your tax revenue so it’s in line with neighboring states.”