New York state is one of the more recent entries into the legal gambling market. The state anticipated huge numbers, and New York bettors have delivered. The state launched legal sports betting on January 8, 2022, and it took just a little more than four months for sportsbooks in the state to take in $7 billion in total handle.
The largest sports betting market in the USA
Industry professionals expected that, when New York legalized sports betting, the state would become the USA’s largest market, and it gained that crown quickly. With reporting from the week ending May 22 in, the state has surpassed $7 billion in total handle after launching less than five months ago. In spite of the typical slowdown in
online sports betting in New York
during April and May, handle and revenue numbers have surpassed most projections, in terms of both handle as well as tax revenue.
Handle numbers for April fell significantly from their March totals, to be expected given the seasonality of the sports calendar. April’s handle was $1.39 billion, still a staggering number, but one that also represented a 14.7% decline from the $1.63 in handle taken in during the month of March. With no previous April to compare it to, there isn’t as much context for the drop as there is in other states that have had legal sports betting for longer, given the calendar issues in play there isn’t much cause for concern. In addition, while handle was down 14.7%, revenue was only down 8.9%, showing that the books were able to hold on to more of bettor’s wagers than in past months.
FanDuel shows no signs of slowing down
While, overall, April was the lowest month in terms of total handle since legal sports betting launched, FanDuel, the state’s top-grossing sportsbook in current
gambling news, took in more than $599,000 in handle, making it the second-best month handle-wise for the book since beginning to take bets in New York. Their revenue numbers were even better, with some of their lucrative promotional offers scaled back and hold numbers beating typical averages the company posted a record-setting $63.6 million in revenue for April. The state’s next two largest sportsbooks, DraftKings and Caesars, both had their lowest totals yet both in terms of handle as well as revenue
The state itself is doing very well, thanks to the enormous marketplace and their massive 51% tax rate imposed on sports betting revenue. The tax rate beats the next-highest state, Pennsylvania, and their 36% tax rate resoundingly and the situation has led to a huge boon for New York’s coiffers. The state has taken in $263.5 million in tax revenue since the January 8th launch. The tax money is earmarked for education and youth sports, and with the intake beating out projections made before sports betting was legalized, these programs can expect to be well-funded moving forward.
The high tax rate might be great for the state, but some sportsbooks are starting to feel the squeeze of having to surrender more than half of their profits. BetMGM was the first to make a public statement, announcing earlier this month that due to the high tax rate they would be scaling back significantly on promotional offers and bonuses. There has been some discussion of reducing the tax rate to provide a more sustainable environment for operators, but as of yet nothing has come to fruition.
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The future is bright for New York sports betting
The first full NFL season of New York sports betting is still on the horizon, and it comes at a great time for operators who have had time to establish themselves and acquire customers in anticipation of sports betting’s busiest season. Given that the early stages have already surpassed projections, a more established market combined with the influx of football-only bettors should continue to yield large handle and hold numbers for operators.
FanDuel might have a stranglehold on the market as a whole, but each of the state’s eight
top bookmakers
took in more than $5 million in handle. The anticipated growth in the fall for the NFL season should increase those numbers significantly. It will be interesting to see where the New York market goes moving forward and if it can sustain its high tax rate as well as a robust market featuring many strong competitors.
