New York Sports Betting, Rising But Sportsbooks, Falling?
New York Becomes #1
In just over a month, gamblers in New York have laid down over $2.4 billion in sports bets since the Empire State launched its online sports betting market in early January. The state has now passed Nevada and New Jersey as the number one sports betting market in the U.S.
The $2.4 billion handle produced over $150 million (approximately) in revenue for the state and gave New York almost $80 million in tax revenue in the first month and a half of operation – the vast majority of this money going to fund education in the state. Geocomply has accounted for 245 million transactions made between two million unique betting accounts in the state.
Operators Fight to Stay Alive Amidst The Madness
New York currently has seven active online operators in the state – DraftKings, FanDuel, Caesar’s, and BetRivers have been in the fight since day one. BetMGM joined on Jan. 17, PointsBet on Jan. 24, and WynnBet on Feb. 3. A total of nine have been approved for operation, leaving two that have yet to launch.
As these commercial operators fight for market share and relevance, they have dished out tons of promotions – including risk-free bets, big payouts, and tons of free betting credits. This has contributed to the huge growth of the sports betting market in New York, but has left operators with big costs to eat. Between their promotions and the 51% tax rate imposed by the state of New York, these operators have actually taken a hit. Not to mention, operators have forked over roughly $200 million in licensing fees to the state.
Caesar’s Sportsbook for example signed up more users than any other sportsbook, likely due to their $3,000 deposit match promotion, but likely lost money for the very same reason. They have since dialed back their promotional offers. DraftKings, another big player, recently reported around a $50 million loss in New York since the launch on Jan. 8 and a 15% decrease in their stock price. Read more about their recent earnings call here.
Other downsides have also emerged – New York’s Office of Addictive Services and Support say that they saw a 46% increase in calls to their gambling hotline in January. Likely due to the accessibility and popularity of mobile gambling in New York.
More On The Horizon
But it seemed to launch at the perfect time for bettors – it gave users just over a month to get used to online betting before placing bets on the Super Bowl, which they certainly didn’t disappoint with. In the week of the Super Bowl, New Yorkers laid down over $472 million in wagers. Bettors’ wallets get a little bit of a break until the start of March Madness next month, where New York will surely see another surge of wagering.
Adding to the madness is a New York Senate bill that recently passed the state’s Senate Racing, Gaming, and Wagering Committee – it seeks to allow partnership between licensed operators and sports stadiums that would place betting sites in New York sports stadiums. The New York Yankees are among the most interested parties for placing self-service standalone sports betting kiosks inside Yankee Stadium. How much traction it would get in a pandemic-ridden world is unclear, but in a pre-pandemic world (2019), Yankee stadium invited over 3.3 million fans into their iconic stadium, so it’s safe to say the opportunity is there.