As New York prepared for the launch of legal online sports betting in early 2022, experts believed the industry would quickly become the biggest in the nation. Little did they know just how quickly that would happen.
So far, NY sports betting has posted eight billion-dollar months through October. More are on the way. And more are coming in 2023. But overall, don’t expect the same output next year.
Each month is expected to fall just short of 2022 totals, resulting in NY sports betting generating an estimated $13.9 billion in handle in 2023.
Based on an average hold of 7.5%, sportsbooks would stand to gain some $1.04 billion in gross gaming revenue, leading to over $530 million in state tax revenue.
Even before online sports betting in New York launched in January, the expectation was for records to fall by the wayside. In the same vein, however, there was fear of sportsbooks not offering up as many promotions or bonuses as in other states.
Certainly, that makes sense, considering the state’s stratospheric 51% tax rate on NY sports betting revenue that restricts the amount of marketing any given company can employ.
Yet in January, heaps of sign-up offers and risk-free bet promotions piled up in New York. As such, 2022 was front-loaded with months that featured sky-high handle amounts that were bolstered by promotional offers. Over the past few months, however, we have seen the New York sports betting industry normalize. Fewer promotional offers. Fewer bonuses.
New York’s tax rate has not affected the pricing of odds in the state, relative to other US jurisdictions with legal sports betting. As such, we can conclude that the handle we see in New York would not change much, if at all, if the Empire State had friendlier taxes.
But the tax rate disincentivizes NY betting apps from running more-frequent promotions and bonuses, which many sportsbooks in other jurisdictions like to do. Not only to attract additional action from the public, but also, one could argue, to show those users frequent appreciation.
Since launching in January, New York has quickly risen to the top of the legal sports betting world.
Quickest to $1 billion in monthly handle. Most billion-dollar months. Most state tax revenue generated. No doubt, that trend will continue into 2023.
The $13.88 billion in handle that New York sports betting expects to generate next year ranks first among 2023 projections by almost $4 billion. Illinois ($9.89 billion) and New Jersey ($9.80 billion) round out the top three, followed by Nevada ($8.69 billion) and Ohio ($8.67 billion), which will launch online sports betting on Jan. 1.
For now, the only full-fledged casinos in New York reside upstate. Of course, within the next few years, that will all change as the state readies for the issue of three licenses for casinos located closer to, and even within, New York City.
As such, when legal retail sports betting went live in 2019, the only options New Yorkers had were brick-and-mortar sportsbooks at one of the four commercial casinos upstate or at one of the tribal casinos with in-person betting. Once online sports betting launched, as expected, action at retail sportsbooks took a hit.
In 2021, when the New York State Gaming Commission first began reporting monthly handle numbers, retail commercial sportsbooks generated $146 million in handle for an average of roughly $16.2 million. This year, through October, those same sportsbooks have accepted $76.5 million in bets. Projections indicate commercial sportsbooks will finish with about $94.5 million in handle, equating to just $7.88 million a month.
As noted, downstate NY casinos will enter the fold within the next few years, with the first potentially going live next year, should Resorts World NYC and/or Empire City Casino receive full-fledged licensing as expected. With those businesses opening much closer to an area with the state’s largest population, there should certainly be a spike in commercial gaming. For now, however, New York remains an online-dominant sports betting industry, with NY betting apps accounting for 98.3% of all bets placed in the Empire State.