No state in the brief history of state-regulated sports betting did what New York accomplished in 12 months. Over $16 billion in handle. Almost $1.4 billion in gross gaming revenue. And, perhaps most noteworthy, nearly $700 million in state tax revenue.
Simply put: The first year of New York online sports betting has been incredible.
If there was one thing Sen. Joe Addabbo was certain of, it was that online sports betting in New York needed to launch in time for the 2022 Super Bowl.
“That’s a great word: Incredible,” said Sen. Joe Addabbo, noting that the Empire State did all it did with just nine online sportsbooks. “What New York has done in terms of mobile sports betting, both in the state and nationally, is incredible.”
NY sports betting tops expectations, sets records
Just over a year ago, the rosy-lensed outlook for NY sports betting was to potentially reach $500 million in annual tax revenue. By 2024. New York, obviously, did it in just 12 months.
With $693 million in state tax revenue, which goes toward public education in New York, the Empire State set an all-time record. Not for a year, mind you. For the life of any state-regulated sports betting industry.
It’s a product of pent-up demand for legal online sports betting in New York, as evidenced by NY sportsbooks taking in over $1 billion in bets 10 times in 12 months. It helped lead the Empire State to the $15 billion handle mark within the year, whereas New Jersey needed nearly three full years to accomplish the same feat.
Again, simply put: Incredible.
“These incredible numbers,” Addabbo said, “this amount of tremendous funds for education and over $1 billion in gross revenue … The idea here is, these numbers are incredible based on the fact that we’ve only done it a year and initially starting the first weekend with only four operators. It is incredible.”
FanDuel finishes first year as NY sports betting king
All told, four of nine NY betting apps exceeded $1 billion in handle during 2022, and three topped $100 million in gross gaming NY sports betting revenue.
But no sportsbook in New York could keep track with FanDuel Sportsbook NY.
Leading to over $650 million in revenue, FanDuel reported $6.5 billion in handle during the calendar year — nearly $2 billion more than its nearest competitor. That runner-up was DraftKings Sportsbook NY, which totaled $4.5 billion in handle and nearly $355 million in revenue.
Meanwhile, Caesars New York clocked in at $2.8 billion in accepted bets. But about half that total came within the first four months of 2022, which included more than $627 million in January alone. The only other online sportsbook to surpass $1 billion in handle was BetMGM Sportsbook NY, which ended the year with $1.3 billion.
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Where New York sports betting goes from here
While certainly justified to celebrate such a historic year in legal online sports betting, as Addabbo put it, “the story’s not over” for New York. Stakeholders and lawmakers cannot just relax and remain content with the state of the NY sports betting industry.
“This is a story that really doesn’t have an ending because we as legislators can’t sit back and say, ‘Oh, we did mobile sports betting, it’s great, let’s sit back,'” Addabbo said. “This is such a competitive market that we’re going to have to stand at the ready and think about how we improve the product for the people of New York.
“Because in a millisecond, I’ve always said, in a millisecond, they’ll go back to what they were possibly doing for two or three years — going to Jersey, doing it illegally, whatever it is — but … the idea is how do we evolve mobile sports betting in New York and make it even better in New York so it has the sustainability of being No. 1 in the nation going forward.”
Moving forward, that could potentially mean authorizing new betting markets, such as individual player award futures; or adding more sportsbooks in the future; or perhaps even lowering the tax rate. In fact, Addabbo noted that a piece of proposed legislation is “floating out there” that would decrease the tax rate by increasing the number of operators.
But as Addabbo emphasized, whatever proposal emerges, that legislator needs to convince Addabbo and his colleagues that it will improve the product for users and better benefit the state.
“Until that argument is made,” Addabbo said, “an argument against what’s happening right now is hard to make. It’s so successful. But I’ll speak for myself, I’m all ears. I’ll entertain any proposal and look at and examine anything forwarded to me. But somebody has to make that argument.”
Retail sports betting in NY takes hit
Not everything about online sports betting in New York was positive in 2022. The state’s four commercial casinos, all located upstate, suffered with the advent of NY online sportsbooks.
Consider the following: Between April (when handle first began appearing in monthly revenue reports) and December 2021, NY casinos combined for nearly $146 million in handle for an average of about $16.2 million per month. In 2022, during that same window, retail sportsbooks acepted just $66 million in bets. For the full 12 months, upstate casinos averaged under $8 million in handle each month.
If that weren’t enough, think back to December 2021, just a few weeks before online sportsbooks went live in New York. That month, casinos reported $21.1 million in handle. Last month, that total fell off a cliff, down to $8.8 million.
We’ll see how retail sports betting looks in the future, especially with the state expected to award three downstate casino licenses to develop gaming facilities in and around New York City.