New York Mobile Handle Could Reach $400 Million For First NCAA Tournament

March Madness means mad money moving in what is already America's No. 1 sports betting state
New York NCAA Tournament Handle Projection
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New York already has hit the heights since launching mobile sports wagering in mid-January. Now the Empire State will make its first descent into madness.

March Madness, that is.

When the New York State Gaming Commission releases its full February figures, the state’s two monthly handles of 2022 will rank first (January) and second (February) in the all-time national post-PASPA era that began in 2018. Not everyone anticipated such a fast start, with many expecting New York to need time to mature before reaching the top of the list and becoming, in the words of Frank Sinatra, “A-number one.”

The Super Bowl, which is the largest single sports betting event in the U.S., has come and gone, and conventional wisdom suggests New York generated the highest handle of any state — but nobody knows for sure, since the NYSGC did not provide official handle and revenue figures from the game. March brings the NCAA Tournament, joining the Super Bowl in the top two of annual betting events and unmatched in terms of drama coming from all angles at a frenetic pace over the course of three-plus weeks.

The largest unofficial betting event in the form of office pools now takes center stage in legal fashion in New York. Eight mobile operators, entrenched to varying degrees, will offer Final Four futures wagers and more, plus various betting lines on up to 66 of the tournament’s 67 games.

After bettors showed a monstrous appetite for the Super Bowl, wagering will again be robust throughout the final two weekends of March and the first one in April. After examining weekly mobile handle figures in New York since launch, basketball-specific wagering across multiple states from 2019 through 2021, and other assorted factors as points of comparison, NY Online Gambling projects mobile betting handle in the Empire State on the NCAA Division I Men’s Basketball Tournament will be between $375 million and $400 million.

That’s wagers to be placed at legal online sportsbooks in New York after the NCAA announced the seeds and brackets on Sunday. Using the industry standard win rate of 7%, mobile operator revenue from that handle would range from $26.3 million to $28 million. With New York’s 51% tax rate on mobile revenue, the state would receive between $13.4 million and $14.3 million.

The NCAA Tournament vs. the Super Bowl

Projecting the Empire State’s NCAA Tournament handle can be challenging. New York has generated weekly handle that would rank in the top 10 nationally for monthly handle every full week since launch. The nearly $360 million in handle for the week ending March 6 was the fourth week in five that New York has posted handle between $350 million and $360 million.

WeekHandle
Jan. 30-Feb. 6$359,839,553
Feb. 7-13*$472,136,168
Feb. 14-20$353,481,983
Feb. 21-27$350,316,283
Feb. 28-March 6$359,488,352
*Week of Super Bowl LVI

The outlier in that stretch was Super Bowl week, in which handle totaled $472.1 million. The NYSGC does not break out handle by sport or divulge any specific wagering information about the game, but the Super Bowl handle may have been at least $200 million. That is a reasonable, conservative estimate, given Nevada set an all-time high with nearly $180 million wagered on the game and New Jersey went from $117.4 million in 2021 to $143.7 million this year despite all those Manhattanites no longer needing to cross the Hudson River to place legal bets.

Is the Super Bowl relevant for March Madness comparisons? Yes and no. One can view the NCAA Tournament as a singular event, but it also consists of 67 single-game events. A more like-for-like comparison could be the NCAA Tournament and the NFL playoffs, in which 13 games are played.

The NYSGC launched on the weekend of Week 18 of the NFL regular season, producing an initial handle report of $171.3 million that covered only those two days. The six wild card round games the next week contributed to handle skyrocketing to $431.8 million in the first full week of wagering. The four divisional round games sparked another bump to $572.6 million.  Notably, the Buffalo Bills played in both rounds.

Weekly handle ebbed the week of the two conference title games, falling to $449 million without the Bills, but that was still 28.3% higher than the recent low-end baseline of $350 million per week.

Assumptions of a similar percentage spike for March Madness could prove faulty for a few reasons, most notably advertising. The NFL has inherent advantages over the NCAA, with nearly all of its postseason games airing on network television. The league is also a marketing leviathan capable of making any superstar a national hero, recognized from the city where he plays to the casual fan hundreds of miles away who simply enjoys football.

This past NFL season, sportsbooks spent gobs of money to advertise their product, with the ability to promote themselves as “official league partners” or “approved sportsbook operators.” Of the eight mobile operators in New York, three (Caesars, DraftKings, and FanDuel) are official league partners and three others (BetMGM, PointsBet, and WynnBET) are approved sportsbook operators.

That advertising spend will not take place during the college basketball games broadcast on CBS and other stations. For starters, the NCAA does not have partnerships with gaming operators, and very few schools do.

Additionally, the majority of games will be aired on cable instead of network television. Even college basketball die-hards must do their annual program guide search to find where TruTV is located for games not found on CBS, TNT, or TBS. Speaking of the latter two networks, while Charles Barkley and Turner Sports have deals in place with FanDuel for NBA content, do not expect the loquacious “Round Mound of Rebound” to go deep on lines and odds when working the studio desk for the NCAA Tournament.

Sportsbooks in New York face the challenge of advertising and promoting their NCAA Tournament specials to their newly acquired customer base via email and social media. While a significant percentage of bettors are still working their way through their initial sign-up bonuses and promotional credits, others are ready to make their next deposit to partake in March Madness. How far operators go to incentivize all those customers with odds boosts and other promotions will affect handle over the course of the next three weekends.

Return of a ‘normal’ March Madness

One big reason to be bullish on NCAA Tournament handle expectations for New York, beyond the novelty of it being the first time mobile wagering is available, is the fact March Madness will be played “normally” again. Last year’s edition was irregular in that the NCAA made the decision to play the whole tournament in Indiana and use Indianapolis as a hub. There was no 2020 tournament due to the COVID-19 pandemic.

This is the first NCAA Tournament with all the bells and whistles since 2019. Do you know how many states (not including tribal gaming) were taking wagers just 36 months ago? Seven. The number of jurisdictions taking wagers now: New York is one of 26.

The tourney will include a First Four in Dayton, Ohio, far-flung locales for sub-regionals in the first two rounds including Buffalo, and a destination city for the Final Four in New Orleans. Ending the tournament in Louisiana marks the second straight year the nets will be cut down in a state with legal sports wagering.

The tournament’s return to normalcy should also apply to everyday life when it comes to the betting public. People will congregate at sports bars to watch games, with the brave ones enduring from first pour to last call. Having the first day of the round of 64 fall on St. Patrick’s Day could prove beneficial around New York City. A few people perhaps won’t feel well enough to go to work, but will be just fine for a pint while dropping money on Providence or a parlay.

But there are some caveats to all the normalcy. At least one of the 67 games will be off-limits to New York bettors due to the ban on wagering in games involving in-state schools.

Colgate claimed a spot as Patriot League champions for the second straight year, and operators in New York will miss out on offering a game that could otherwise draw above-average action. Many hoops fans quickly circled the No. 14 Red Raiders’ matchup with No. 3 seed Wisconsin as a game where an outright upset could take place, and the betting line could move notably before tipoff.

The Fighting Adonal Foyles did not help bettors who backed them last year, failing to cover as 8.5-point underdogs in an 85-68 loss to Arkansas as a No. 14 seed.

Is past history elsewhere indicative of NY’s potential?

Between having mobile wagering available for the NCAA Tournament for the first time in New York and the Empire State being the largest market in the nation where legal mobile betting is available, there are no sets of data points that offer a straight-line comparison for projection.

For example, one does not simply take Illinois’ numbers from March 2021 and extrapolate them to New York with a population multiplier to produce an estimated handle. Additionally, projecting this handle does not mean looking at the month of March alone. The final three games are played in April.

That said, using figures from 2019 to 2021 for reference, certain states do provide data points and patterns that can help with projections.

The lone state that provides specific college basketball handle is Colorado, which has slightly less than one third of New York’s population. Last year was the first NCAA Tournament legal sports wagering was available in the Boulder State, and its numbers were boosted by a Colorado team that reached the second round. Its month-over-month handle from February to March surged 79.4% to $71 million, and another $6.8 million was wagered in April on the Final Four and title game.

Then there is Illinois, where the state gaming agency does not provide specific college basketball handle but does have breakouts involving college sports wagering and basketball wagering. While college basketball is not the only game in town, it is obviously the predominant one this time of year.  Mobile operators in Illinois were active during March Madness for the first time in 2021, and college sports betting nearly doubled from February to March, going from $137.2 million to nearly $260.4 million. Another $22.8 million was wagered in April. Basketball-specific betting from February 2021 to March 2021 increased 41.9% to $363.2 million.

And it is well-known that Illinois has left, and continues to leave, handle on the table when it comes to the NCAA Tournament. Last year a total ban existed on wagering involving in-state schools, which meant no action on Loyola’s second-round upset of top-seeded Illinois. Even minus that game and three others involving the Ramblers and Illini, the Illinois Gaming Board reported five of the six operators accepting wagers at that point totaled $176.8 million in NCAA Tournament handle for March — a figure that also did not include the Final Four.

Indiana reported double-digit percentage increases both in basketball handle (26.4%) from February to March last year and year-over-year in February (41%) from 2020 to 2021. Its February 2022 report released Friday showed a 58.7% increase in basketball handle year-over-year to $201.9 million, which is impressive considering the Pacers are well out of the NBA playoff picture and only Purdue, Notre Dame, and Indiana were tournament-viable among the state’s 10 Division I teams.

Lastly, there are three states where basketball-specific data from 2019 through 2021 can be found: neighboring New Jersey, Nevada, and Mississippi. The Garden State saw basketball handle increase 35.8% from February to March in 2019 and 35.6% in 2021. The basketball handle from March 2019 to March 2021 more than doubled from $205.8 million to $441.7 million.

Nevada’s basketball handle from February to March in 2019 rose 92.4% to $495.5 million, while the 2021 month-over-month increase was 53.9% to $501.5 million. The smaller increase last year likely reflected Las Vegas’ difficulties as a tourist destination during the pandemic.

On a much smaller scale and with exclusively retail wagering, Mississippi also had double-digit percentage handle increases for basketball from February to March in 2019 (55.1%) and 2021 (16.5%), while the basketball handle from March 2019 to March 2021 climbed more than one third to $33.4 million.

It is important to point out the numbers in the previous paragraphs represent all basketball wagering, pro and college, but it is reasonable to believe at least 50% of the basketball handle generated in these states comes from the NCAA Tournament.

Arriving at a final number

The states that help most in trying to make a reasonable projection for New York’s NCAA Tournament handle are Illinois, Indiana, Nevada, and New Jersey, though Colorado also offers some help with its college basketball-specific numbers. Illinois has key similarities in terms of being a large market, the percentage of mobile wagering to overall wagering, a strong estimated figure from available statistics, and a comparable roster of mobile operators to New York with the launch of BetMGM on March 5 as its seventh option.

Every state listed showed significant increases in relevant handle categories both from February to March in 2019 and 2021 and from March 2019 to March 2021. There is every reason those patterns will continue this March, especially with wagering now a bigger part of mainstream sports coverage. The NCAA may not let its rights holders show betting lines, but ESPN, Fox Sports, and every other media with ties to sportsbooks will have odds available on their screens and websites.

With exposure comes awareness, with awareness comes interest, and with interest comes wagering.

The parallels to the NFL playoffs may be imperfect, but the numbers hold value. Even with the concession that the Bills helped drive the excess amount in New York in the first two rounds, it’s impossible to ignore the conference championship numbers resting nearly 30% above the non-football weeks that followed.

Two NFL postseason games will outweigh two contests in any other sport when it comes to wagering, but the offset comes in the volume of NCAA Tournament games. The first week, 52 games will drive the increase relative to the $350 million baseline markedly above 30%, perhaps even double to 60% or more if games are close and generate higher levels of live betting.

Projecting handle for the 12 games on the second weekend is more tricky. If the blue bloods are still around — think Duke, Kentucky, Kansas, Gonzaga — casual fans and bettors could be more inclined to give those games the old college try. UConn getting to the second weekend would also drive interest in the New York metropolitan area, and everyone loves a good Cinderella story of double-digit seeds playing into the second week.

Then there is the Final Four and the national championship game, which will likely represent anywhere from 5% to 10% of the total sports betting handle for the month of April. For this exercise, we have settled on 9% — slightly higher than the 8.1% derived from Illinois’ college sports handle in March and April in 2021, and lower than the 12.1% from Colorado’s college basketball handle in that same time frame. This year, the title game will also be the lone basketball game available for wagering that night, as the NBA has returned to its custom of not scheduling against it.

Add everything together, and NY Online Gambling’s projection for New York mobile handle is $380 million, with the belief that the floor is highly unlikely to be much below that number but that the ceiling could be considerably higher. A final total exceeding $400 million is certainly possible, given the novelty of legal mobile betting on the NCAA Tournament in New York, the potential for increased live betting in close games, and bettors showing no signs of letting up since the state’s launch.

Illustration by Blundell Design

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