This weekend marked the six-month anniversary for online sports betting in the state of New York. Officials were definitely in a celebratory mood for the occasion.
On Friday, Gov. Kathy Hochul’s office announced the state had received more than $300 million in tax money from revenues generated by online sportsbooks, which were allowed to start on Jan. 8. That’s more than either Pennsylvania or New Jersey have collected in taxes from online and retail sportsbooks over the last four years.
In just six months, New York has become a leader among states in implementing successful gaming policies, with hundreds of millions of dollars going to important programs that will improve the lives of all New Yorkers… I look forward to continuing to enact responsible gaming policies that provide exciting entertainment for New Yorkers of legal age – all with important safeguards in place to help those who need it,” the governor said.
The windfall New York has received has already put the state well ahead of its own projections in terms of tax revenue. The state expected to get $249 million from sports betting in the 2021-22 fiscal year, which ended on March 31, with $200 million of that coming from licensing fees. The state ended up netting more than $360 million from sports betting in the last fiscal year.
The state’s receipts continue to top expectations. For the 2022-23 fiscal year, New York forecast $357 million in sports betting tax revenue. Through the first quarter of the fiscal year, it’s already received more than $152 million. With the NFL season still to kick off – football is the most popular game for sports bettors – it’s highly certain the state will easily beat the 22-23 forecast.
“The numbers and time line clearly indicate that New York’s model successfully harnessed the excitement of sports wagering and continues to maximize its potential,” said Robert Williams, the executive director for the New York State Gaming Commission.
High Tax Rate Fills New York’s Coffers
The main reason for the state’s haul is the 51% tax placed on gross gaming revenues. The tax rate was the brainchild of Hochul’s predecessor, Gov. Andrew Cuomo.
Sports betting has been legal in New York since 2019. However, it was initially limited to retail sportsbooks at the state’s Class III commercial and tribal casinos, all of which are located upstate. Lawmakers pushed to legalize online wagering, but Cuomo was never receptive to proposals until the COVID-19 pandemic arose. At that point, the state was facing the potential of a multi-billion shortfall due to the shutdowns that pinched state tax revenue streams.
In budget negotiations with lawmakers last year, Cuomo insisted operators bid for licenses. The state set up a solicitation process that seemingly ensured operators would have to cede half of their gross gaming revenue.
Since the launch, some operators have lobbied Albany to get the rate lowered. But so far, that’s been to no avail. There also has been some talk about expanding sports betting to potentially offer licenses to all who applied last year. But that, too, did not gain much traction in the legislature.
It’s possible expanding sports betting could come back up in Albany when the legislature convenes next year. State Sen. Joseph Addabbo (D-Queens) and Assemblyman Gary Pretlow (D-Mount Vernon), who chair their chambers’ gaming committees, have championed legalizing online casino gaming in the state. That could open the door for additional operators to get licenses, and/or create a discussion on lowering the online sports betting tax rate.
Almost all of the proceeds garnered from sports betting taxes will go to fund the state’s education programs. In addition, $5 million in tax revenues will fund athletics programs for underserved youth, and $6 million will be allocated for problem gambling education and treatment.
Chinazo Cunningham, commissioner for the state’s Office of Addiction Services and Supports (OASAS), said his agency is eager to see how the new funding stream will help increase prevention and recovery services across the state.
“These additional funds will allow OASAS to enhance efforts to prevent problem gambling and reach more individuals with screening and treatment services in all areas of New York State,” he said.
What They Said About NY Online Sports Betting
“New York State has already exceeded all expectations by outperforming any of our competition in the mobile sports wagering arena in just a short six-month period,” said Addabbo. “That is because we provide the solid New York fanbase with high-quality mobile betting from dedicated providers, who make it a priority to give customers a top-of-the-line experience on their apps.”
“There was no doubt in my mind when we put together the legislative mobile sports betting plan what the outcome would be,” Pretlow said. “I looked at what New Jersey was doing, and I knew that a large part of their success was based on New Yorkers crossing the state line. I saw it as an opportunity to keep more tax revenue and make New York the largest betting market in the U.S.”
New York Sports Betting By The Numbers
Last year, the New York State Gaming Commission awarded licenses to eight platform providers who operate nine sportsbooks. The operators active in the state are BetMGM, Bet Rivers, Caesars Sportsbook, DraftKings, FanDuel, PointsBet, Resorts World Bet, and Wynn Interactive. They were joined this past week by the final operator to go live, Bally Bet.
In all, more than $8.64 billion has been wagered in the state since online sports betting began.
The leading sports betting operator in New York by both handle – the total amount of bets taken – and gross gaming revenue is FanDuel. Since its launching, the Flutter Entertainment brand has reported a handle of $3.43 billion and a GGR of $281 million.
DraftKings has reported figures of $2.12 billion in terms of handle and $139.9 million in GGR, while Caesars has accepted $1.8 billion in bets and generated $129.9 million in GGR. BetMGM, which launched a couple of weeks after the top three, is fourth in terms of handle ($775.4 million) and GGR ($32.2 million).
Those four operators control 94% of the handle since online wagering launched, and 95.1% of the gross revenues.
According to GeoComply, which provides geolocation security services for online operators, there have been nearly 3 million unique player accounts created since online sports betting went live on Jan. 8. Those accounts have generated about 707 million geolocation transactions. While a geolocation transaction does not always lead to a completed wager, GeoComply has said the metric is a good indicator of betting traffic in a market.
The post New York Online Sports Betting Still Ahead of the Game After Six Months appeared first on Casino.org.