A Month in Review: New York Sports Betting Market Sets Records
The official first month of mobile sports betting in New York state concludes today with phenomenal results.
The state’s official handle topped $1.6 billion – the single-month record for any legalized state, beating out New Jersey, which recorded $1.3 billion in October 2021.
Eric Ramsey, market analyst lead for PlayUSA Network, told CBS MoneyWatch: “Some states have taken months, even years, to get up to a running pace, and New York seems to have hit the ground at full gallop.”
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Sports betting operators were drooling to penetrate the New York market, anticipating these results.
Currently, seven operators are live in the state after WynnBet launched last Thursday. The other six reported the following revenue:
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Customer Acquisition
These impressive numbers come at a cost, as the competitive environment calls for aggressive marketing campaigns to entice consumers to play.
Chad Beynon of the Macquarie Group, a global financial services conglomerate, told Yahoo Finance in a recent interview that he expects companies in New York to lose money in the near term due to customer acquisition expenses. However, over time, they should overcome these costs and become profitable.
FanDuel and DraftKings are two of the top sports betting operators, but spend aggressively:
• DraftKings doubled its marketing spend in the first three quarters of 2021 – spending $703 million after an aggressive third quarter push coinciding with the NFL season
• FanDuel reported a $1 billion spend on July 1, 2021 – estimating 40% of new sports bettors utilize their service
Other companies like Caesars Sportsbook offer aggressive promotions like matching up to $3,000 in deposits. Whether that is sustainable long-term is disputable, but it proved effective as they accounted for 40% market share in New York’s first month despite many issues.
Previous Tax Concerns
The early success may not be unexpected, but analysts and operators alike were concerned with taxation.
New York State imposed a 51% tax on the state’s sports betting revenue, which is steep compared to states like Louisiana, which only levied a 15% tax on mobile betting and 10% on retail.
However, the relationship remains amicable, as NY Governor Kathy Hochul’s budget plan expects $357 million in Fiscal Year 2023 as the betting handle continues growing exponentially – also benefitting operators.
What’s Next?
The second legal month of mobile sports betting in New York will be even more exciting, allowing the market to adjust and begin to determine which sportsbooks will dominate market share.
BetMGM, DraftKings, and FanDuel reign supreme, but Caesars tops the New York market. February and beyond, however, will be an indicator if this is due to unsustainable promotions and deposit bonuses.
BetMGM and PointsBet have only been in the market for a couple of weeks and will look to build their presence and further competition.
Bally Bet expects to become the eighth operator to go live, and Super Bowl LVI will be played Sunday, February 13, offering even more opportunity.
SEE ALSO: Super Bowl Picks and Predictions
PlayUSA predicts New York sportsbooks to have a $160 million betting handle for the big game, second to Nevada’s projection of $175 million - leading experts to believe this market may break its inaugural record.
