Late last week, the New York State Gaming Commission released the report that indicated exactly why sportsbook operators were willing to pay the highest tax rates in the country to get access to Empire State bettors.
In just 23 tallied days, from Jan. 8-30, New York bet $1.65 billion on sports, easily breaking New Jersey’s record for monthly handle of $1.3 billion and setting the stage for what could be an absolutely epic Super Bowl weekend of sports wagering. Now that seven mobile operators are going strong in New York, February could see the state make a run at greater than $2 billion in handle.
There are also four commercial casinos taking retail bets, but the mobile handle accounted for 98.7% of all dollars wagered in New York in January.
“Breaking this record proves that New York was ready for mobile sports betting and we are providing our state with a new revenue, educational, and addiction funding source,” New York state Sen. Joe Addabbo said in a statement. “It also can give us an indication of where we go from here, especially with the Super Bowl within our sights. The future is extremely bright for mobile sports betting in New York!”
Early leaders jostle at the top
It’s nuts. Despite what some experts thought was an overly punitive 51% tax rate on gross gaming revenue (GGR), the operators seem to be doing just fine. Caesars, which continues to hold the largest share of the market with about 38%, will split nearly $56 million in GGR with the state.
Weekly handle share trend since launch: pic.twitter.com/3Rk1rRo6xp
— Chris Krafcik (@CKrafcik) February 4, 2022
So far, booking bets legally in New York certainly hasn’t been a losing proposition.
But what happens after the party, when someone turns on the lights and tells everyone they have to go home? The Super Bowl is expected to drum up about $7.6 billion in nationwide handle, legal and otherwise, but what will happen in betting-crazy New York after it’s over?
Others standing by
Two of the original licensees haven’t even launched yet. Bally Bet has stated its intention to wait until April to go live in New York, while a Resorts World source indicated last week that it is unlikely to be up and taking bets before the Super Bowl.
Will there come a time when the New York market no longer is the gift that keeps on giving?
March should be fine given the madness of the NCAA tournament, but the MLB lockout has frozen one market New Yorkers — especially Mets fans — figured to engage in pretty robustly, MLB futures.
Before the lockout, bookmakers saw by far their most action on the Mets after a flurry of moves that included signing perennial Cy Young candidate Max Scherzer. New York is the birthplace of baseball and Yankees and Mets fans typically would look to line up their futures bets after the Super Bowl. Baseball is missing plenty of opportunities as it continues to haggle over the revenue pie, including a chance to firmly get on the legal gambling train.
Bettors seek the best products
The market shifting could continue for a while. First-mover advantage may diminish, and Caesars, the early leader, continues to deal with complaints over its technical platform.
As the most outlandish promotions thin out in the weeks and months following launch, the operators will have to compete by offering the best deals for bettors and the best experiences using their technology.
“Factors like signup process, engagement, the ease of the user interface, and ongoing odds boosts become more important,” said Joe Stauff, an institutional investment analyst. “Just generally, things associated with technology and software, like how quickly an operator fixes things, become important intangibles in determining which customer stays on the app or churns after the initial offering.”
Addabbo told NY Online Gambling recently he thinks New York has enough pent-up sports gambling demand to make for successful launches at Resorts World and Bally’s. If the early weeks are any indication, he’s probably right. As the market sifts itself out and the competition grinds on, however, it’s going to take more than a splashy ad, a big promotion, and a respected name to win the long game.