With two full fiscal years now under its belt, New York’s online sports betting industry hit a 12-month high for April, narrowly missing out on reaching $2 billion in handle.
Much has already changed in a developing market since mobile wagering on sports was legalized in January 2022. State gambling returns remain buoyant and are still growing, with opportunities still to exploit.
High tax rates have yet to put off big new entrants and legislators in Albany must be delighted with the returns that have boosted state earnings.
Some sportsbooks have already departed but the recent launches of fresh heavyweights poised to take on the now-established giants suggest the biggest regulated sports betting market in the US will only get bigger.
Despite some calls for change, New York’s gambling tax rate of 51% has steadfastly been set that high since legal sports wagering began. A significant portion goes to education funding. That includes public schools, colleges, and gambling harm programs. Some of the gambling tax revenues are also used to support other government services.
Now that the second fiscal year has been fully completed and the New York State Gaming Commission has published its results, tax returns for the period April 1 2023 to March 31 2024 hit $898.5 million. That was an increase of 21% for the previous fiscal year ($743.98 million).
The enormous power of DraftKings and FanDuel NY has left a marketplace devoid of much competition. Caesars and the BetMGM sportsbook continue to plug away but neither shows much sign they can topple the pair of top guns.
It is left to the arrival of ESPN Bet and Fanatics in New York to demonstrate how to shake things up then. Both are massive global sporting brands.
One is a rebranded Penn Entertainment product backed by Disney no less. The other has a bold vision to dominate the sports betting industry as it has in the apparel and collectables sectors to capture whole breeds of players.
Fanatics is now live in New York, operating under the PointsBet license it bought. ESPN Bet NY is expected to launch in the fall of 2024.
It will be a while until we know more about how sports betting is going to shape up in New York for the rest of the year. What we do know though is that April 2024 was another strong month indicating more of the same.
The top sportsbooks in New York, and other legal operators, combined to achieve a total handle of $1.96 billion in the month. That was the fourth largest the Empire State has recorded. Following a slight tail-off in March, total dollars wagered in April was roughly on par with the high numbers achieved for October, November, and December 2023.
As a result, Gross Gaming Revenue (GGR) reached $183.8 million, a rise of over 32% compared with last April. Nearly $94 million of that was gobbled up by the state for those educational initiatives mentioned above.
Big opportunities for more are still on the cards too. The potential award of additional mobile sports betting licenses and a change to the tax rate are two factors likely for the longer term, however.
What could be seen soon though is a relaxation of the rules on the nature of wagers placed. That could include widening allowed prop bets and future awards based on a vote to determine the winner such as tournament MVP. New Yorkers might also soon be able to bet on more obscure things like the Super Bowl halftime show or even the color of the Gatorade shower.
Senator Addabbo, the most vocal advocate for broadening the scope of betting in the state, calls such initiatives “making New York mobile sports betting product better.” Any such moves also have the potential to increase how much New Yorkers wager and attract new players. And that will only increase the huge tax returns further.
