New York Mobile Sports Betting Handle Clears $7B in May
New York online sports betting has cleared $7 billion in May, becoming the fastest US state to do so in the fifth month of operation.
According to the figures released by New York State Gaming Commission, the state’s mobile operators reported a combined handle of $7.15 billion between January 8 and May 22.
Four major operators – FanDuel, DraftKings, Caesars, and BetRivers – kicked off the NY online gambling market on Jan. 8, 2022.
In November, the state regulators had approved nine operators – among two groups – to offer mobile sports betting in New York, which has become the nation’s largest market after dethroning New Jersey.
DraftKings, BetMGM, and Bally’s had won one of the super birds led by FanDuel.
Wynn Resorts, PointsBet, Rush Street Interactive, and Resorts World, led by Kambi, had secured the other bid.
Of the nine operators, only Bally Bet has yet to launch.
New York’s Lowest Sports Betting Handle Since Launch
New York mobile sports betting, which releases a weekly handle, reported $261 million for the week ending May 22. It was the lowest weekly handle since its opening two-day week in January, which had amassed $171.3 million in mobile bets in two days (8-9 January).
It is also the first time ever that NY online operators posted back-to-back weeks of handles of less than $300 million. The previous week (May 9-15) had brought in $286.2 million.
The unprecedented dip in NY online wagering is due to the summer slump – a period between April and September – with fewer sports betting activities due to relative calm in the sports calendar.
NY Generates Millions in Taxes
Since Jan. 8, the Empire State has generated $263.4 in tax revenue from mobile wagering. With an exorbitant rate of 51%, the NY tax rate on mobile wagering is the highest in the nation. Only New Hampshire has the same tax rate, but considering its 73.1 million handles in April, it’s a tiny market. Delaware and Rhode Island also have similar tax rates in a monopolized market.
Of the eighth New York sportsbooks, FanDuel led its dominance by posting the largest handle share through May 22, at $2.75 billion. The New York-based operator concluded nine consecutive weeks with its 40%-plus market.
DraftKings was the second-largest operator in NY online market, at $1.73 billion, followed by Caesars, at $1.58 billion.
The NY mobile sports betting market share from Jan. 8- May 22: FanDuel (39%), DraftKings (24%), Caesars (22%), BetMGM (9%).
As mentioned above top 4 operators have combined for 94% of the total market share, suggesting things are not ideal for the small players.
Bally Bet may launch by July 1.
All is Not Good About NY Online Market
The New York mobile market was expected to set new standards for US sports betting. The first of the ‘Big Four’ state appears to have flourished to a lay observer. However, most industry experts termed its tax structure as ruthless and unjustified.
It has been particularly nightmarish for the state’s sportsbooks and probably the biggest reason why Bally Bet – a small player – has kept pushing its launch date.
For the same reason, BetMGM and DraftKings have renewed the oft-repeated complaints about the unjustified tax rate that has come at the expense of the operators’ profits.
Former Gov. Andrew Cuomo’s model of making more and more money appears to have succeeded. By the end of May, the Empire State is expected to generate more tax revenue than any other state in the lifetime revenue generation.
But the exorbitant tax rate appears to have pushed even the major operators to the wall, with BetMGM’s CFO announcing the company would be forced to reign in its advertising in New York. Gary Deutsch, who was speaking during BetMGM’s recent investor day, said, “The house cannot continue to play if it is always going to lose.”
Caesars Digital also posted an EBITDA loss of $500 million in Q1, terming the majority of that loss coming from the NY market.