Now what?
That’s the key question after the release of the numbers for the first nine days of legal New York online sports betting.
On Friday afternoon, the New York State Gaming Commission released the financial data that surpassed the highest of expectations.
FanDuel, DraftKings, Caesars and BetRivers combined to take a staggering $603.1 million in wagers over that span (Jan. 8-16).
But what’s it all mean going forward for NY online sports betting? PlayNY takes a look.
1. Caesars Is No. 1, But Will It Stay There?
On Day 1, Caesars NY Sportsbook came out swinging with a $3,000 match + $300 bonus promo offer. And you couldn’t miss JB Smoove’s face outside basically every subway entrance in NYC. That massive promo and advertising spend led to $257.7 million in handle. But a lot has gone wrong. Two Saturday outages, and apparently there was a brief outage this Sunday as well. Plus, the whole mess with delayed withdrawals and non-existent customer service.
Read More: Caesars Sees Q1 2022 Digital Loss Of $400 Million
In the process rightly got called out by NY State Sen. Joe Addabbo for the early debacle. The operator eventually apologized via ESPN, but there’s certainly been plenty of damage done. Many customers have said they’re headed elsewhere. And now, the massive promo is gone. Caesars needs to get its act together, and soon.
2. DraftKings Disappoints At No. 3
Industry titan DraftKings ($134.4 million) is used to battling fellow industry titan FanDuel ($200.4 million) for the top spot. Not finishing third. But, well, that hasn’t happened, at least so far. It’s certainly still possible, especially with Caesars’ initial follies. Yet DraftKings NY Sportsbook in the No. 3 position is very much reflective of an operator that was open about the fact it wasn’t going to invest heavily in terms of promos or ads in NY given its massive 51% tax rate. Polarizing CEO Jason Robins has said he thinks he can achieve profitability in the state within two-three years. DraftKings needs improvement in a lot of places — its plummeting stock price being one, its standing in NY being another.
3. It’s Going To Be Tough For The Little Guy
It was always going to be an uphill battle for any of the smaller operators. in NY. And BetRivers ($10.6 million) certainly showed that. With a lesser budget for advertisements and promos, it’s tough to compete with the likes of FanDuel, DraftKings, Caesars and recent newcomer BetMGM. WynnBet (its online sports betting arm reportedly for sale) and Resorts World figure to face similar challenges. BetRivers New York Sportsbook seemingly had an opportunity as the first of the smaller operators that went live, but it didn’t make a dent. Already having a retail sportsbook in Schenectady and branding in NY didn’t do much. BetRivers has been far more successful in Pennsylvania and Illinois.
4. BetMGM’s Record Day 1, Wild NFL Playoffs Mean More $
BetMGM CEO Adam Greenblatt said the operator set records across the board for any of its US state launches on Jan. 17 in NY. And after getting 17.2 million geolocation pings on Opening Weekend and 17.9 million pings on NFL Wild-Card Weekend, imagine how many NY got this past weekend with four unbelievable playoff games on the docket. Will BetMGM NY Sportsbook crack the top 3?
Buffalo’s heartbreaking overtime loss to Kansas City is crushing for Western NY, but it’s doubtful to stop the money train that is legal online sports betting. And with another NFL playoff Sunday to come before the end of January, pretty much all records seem on the table.
5. The 51% Tax Rate Is Good For NY … So Far
Look, this story isn’t going anywhere. And it could easily change. But for now, NY is loving its 51% tax rate, already generating a US-record $24.6 million in taxes for education and youth sports programs. It’s impossible to dislike that. Now, whether the lines and rate are sustainable for operators as promos die down remains to be seen.
