New York’s mobile sports betting market opened at the start of 2022, exceeding everyone’s expectations by accumulating more than US$13 billion in betting activity since its launch. However, some experts from the industry predict that the digital sector will not be able to replicate its results from this year into the next one, as handle is expected to go drop.
As said the local online market launched in January 2022, and it allows for a total of nine digital sportsbooks to offer legal sports betting in the Empire State. However, their entry to the market comes at a hefty price, as the state taxes 51% of their gross gaming revenue. There were calls of reducing the tax rate, but whether lawmakers agree to it remains to be seen.
Early Projections for Next Year
Each month of next year is projected to fall just short of the 2022 totals, resulting in a total wagering handle of US$13.9 billion in 2023. And based on an average hold of 7.5% for sportsbooks, they are expected to earn US$1.04 billion in GGR. And with the decrease in revenue, tax revenue is also expected to drop to approximately US$530 million in 2023.
Before the market launch, there were predictions that volume would decrease by the end of 2022. There were also concerns that sportsbooks may not offer as many promotions and bonuses in the state, as they usually do in other jurisdictions. This was a valid concern, due to the 51% tax rate on revenue, which is by far the highest rate in the country.
But at the start of the market, sportsbooks debuted with an abundance of hefty risk-free or sign-up offers for bettors. Due to this, the first few months of operations and handle was massively boosted by promotions and bonuses. But since then, the market has normalized and the nine operators do not rely on that big of bonuses now, due to the tax rate.
It should be noted that the introduction of the online market has also affected retail sports betting. Currently, the state’s sports wagering market is dominated by the online sector, which accounts for 98.3% of all bets placed on sports in the state. However, land-based sportsbooks will receive a little boost as the state is in the process of awarding three more downstate casino licenses.
Targeting Dangerous Bonuses
At the start of December, a bill was introduced by state Sen. Pete Harckham (D-Lewisboro) which is supposed to target predatory sports betting bonuses. If passed as law would order the New York State Gaming Commission to present new rules and regulations to deal with the said bonuses. Currently, the bill does not have a co-sponsor in the Assembly and it sits in the Senate Rules Committee.
On the matter, Sen. Joe Addabbo commented that he will call a meeting with Mr. Harckham, Assembly Racing and Wagering Chairman J. Gary Pretlow, and members of the commission and leaders in the addiction sector. Then they will debate potential rule changes for the operators when the Senate next meets in January 2023.
