New York Expects $250 Million In Online Sports Gambling Revenue This Year

Governor says state could reap more than $1 billion within three years of launch
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New York is expecting online sports gambling to provide more than $1 billion in revenue to the state within three years of going legal.

Gov. Kathy Hochul’s office said in its budget proposal released on Tuesday that the operators licensed in New York are expected to provide $249 million in revenue to the state in 2022, including $200 million already collected in licensing fees. The projection is $357 million for 2023, $465 million for 2024, $493 million for 2025, $509 million for 2026, and $518 million in 2027.

Four operators began taking online bets in New York on Jan. 8, followed by BetMGM, which launched on Monday. The other four licensed operators are expected to go live with their betting apps in the coming weeks.

Tax rate not dimming enthusiasm

New York’s 51% tax rate on gross gambling revenue is tied with New Hampshire for the highest such rate in the country. Thus far, however, the high tax rate apparently hasn’t dimmed operators’ enthusiasm for signing up bettors in the Empire State.

In the first weekend bets were taken, the state said there were $150 million in wagers placed and 650,000 unique accounts created. That momentum has continued unabated. Per the latest GeoComply numbers, 1.2 million unique accounts have been created in New York since launch.

Starting in 2023, $6 million of the state’s revenue share will go toward addressing problem gambling in New York, $5 million will go to youth sports programs statewide, and the rest will go toward funding education.

There are also measures to expedite the issuance of three casino licenses for downstate New York, removing any penalties such operators would have to pay the owners of the four existing upstate casinos. New York state Sen. Joe Addabbo, a vocal proponent of legalizing gambling to provide revenues to the state, said he projects downstate casino projects to bring in an additional $1.5 billion to the state.

“I look forward to continuing to work with the Hochul administration and the gaming commission to ensure that gaming in the state expands and advances in a credible, reasonable manner,” Addabbo said in a statement.

New Jersey figures stay strong

Even by the standards of the gambling-happy Northeast, New Yorkers’ enthusiasm for placing online bets has stood out. More accounts were created in New York than in neighboring New Jersey and Pennsylvania combined between Jan. 8-17, according to GeoComply, and 87.8% of the New Yorkers who created accounts were new to regulated sports betting.

“The momentum of New York’s sports betting launch has continued and it is mostly homegrown,” said GeoComply’s managing director of gaming, Lindsay Slader, in a statement. “The vast majority of users are brand new to regulated sports betting in the U.S. The data tell us that New Yorkers are dumping illegal sportsbooks for the new legal options and operators are also excelling at attracting first-time bettors.”

It was long estimated that roughly 20% of New Jersey’s handle came from New Yorkers crossing the border. While that may be true, the launch in New York hasn’t appreciably hurt New Jersey’s level of action. Per GeoComply, New Jersey averaged 12.6 million geolocation transactions over the two weekends before New York’s launch and 13.1 million in the two weekends since. GeoComply’s data shows that just 9.3% of players have placed wagers in both New Jersey and in New York since the latter state launch.

“New York hasn’t failed to dazzle us, but we are also impressed by the sustained growth of the overall sports betting industry,” Lindsay said. “We can’t wait to share how many more GeoComply data records are broken from now through the Super Bowl.”

Photo: Tina McIntyre-Yee/USA TODAY

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