Once more, New York State’s mobile sports betting and its tax rate is among the most heavily discussed issues in the local industry. This is due to the fact that weekly sports handle dropped by US$33 million from the first week of the NFL season. However, despite the drop in volume, the state acquired more in tax revenue as it increased for the week of September 18, 2022.
The state’s mobile sports betting market allows for a total of nine private sportsbooks to operate in the jurisdiction. The sector opened on January 8, 2022, and since its start, the nine companies have already surpassed a total of US$11 billion in online handle as of September 18, 2022. This has delivered over US$866 million in GGR and US$442 million in tax proceeds.
Volume Drops Again
Back in January, the market saw a tremendous amount of volume, as for the first several weeks handle often surpassed US$400 million. However, the interest can be explained via the NFL playoffs, while currently, the season is at its opening games. The drop-off in the handle is also due to the lack of the hefty welcome bonuses operators launched at the start of the market.
As the market has now matured, and there are no such generous welcome bonuses, the nine sportsbooks are now cutting back on marketing and spending drastically less on promotions. Operators insist that another reason for the lower interest in online sports betting is the state’s tax rate of 51%. And according to them, it affects the long-term road to profitability for their apps.
This week, Assemblyman Gary Pretlow, one of the biggest lobbyists for online sports betting in the state, said that the lower volume is not surprising. He commented that the incentives are not there, as in the start of the market operators were offering free play and matching play, which was also included in the state’s overall handle. That is why the handle seems so low now.
Mr. Pretlow continued by saying that due to the 51% tax rate on revenue and promotions, operators are now less likely to spend as much money as before on promotions. He believes that there will be a significant decrease in handle as money now is all coming from the local bettors and not necessarily from the licensed sportsbook apps, such as DraftKings, FanDuel, and Caesars Sportsbook.
iGaming is Also on the Cards
Back in April, Empire State lawmakers shared their plans of also introducing regulated online gambling in the state. They even suggested financing bills to make it a legal option in the near future. Sen. Joe Addabbo even proposed having fixed-odds betting on horse races. He said that he will be making the change a top priority in the 2023-2024 budget discussions.
But with the talk of online gaming, some operators have expressed their concerns that it could lead to the cannibalization of the land-based casino industry in the state. However, Mr. Addabbo assured that the introduction of online casino play will not affect brick-and-mortar amenities. If introduced the new offering will be tied to the state’s commercial venues, which is also the case for mobile sports betting.
Source: Mazzeo, Mike “Is Online NY Sports Betting ‘Broken’ While Revenue Pours In?” LegalSportsReport, September 29, 2022