With the completion of the state fiscal year in March, Albany now has two years’ worth of economic data to gauge the impact of legal online sports betting in New York.
Given the market’s across-the-board growth, it is a safe bet to assume elected officials in the state capital are more than happy with the financial returns.
And, considering that New York is now the largest regulated sports betting market in the US, it is probably fair to say that most online operators doing business in the Empire State are also pleased – even with high tax rates.
As the state explores the possibility of legalizing NY online casinos (which are far more lucrative and decidedly less volatile than sports), examining internet sports wagering is a valuable exercise for lawmakers to undertake.
Thankfully, PlayNY is here to help. Here are a few takeaways from two full years of online sports gambling data, courtesy of the New York State Gaming Commission after operators combined for a March-best $1.85 billion in accepted bets and $151.68 million in gross gaming revenue.
Sports betting still growing in NY, but dominated by two forces
There was a point in time when gambling executives and industry pundits wondered aloud if online operators would even want to do business in NY because of high taxes.
Seriously. People actually believed that.
New York taxes online sports betting revenue at a rate of 51%, which is objectively high. And it has contributed to separating the market’s winners from its so-called losers — if generating millions of dollars each month while having minimal overhead can be called “losing.”
But the WynnBets and PointBets of the world didn’t hightail it out of the online sports betting game because of high taxes in NY. Rather, they left because the juggernauts of the industry — FanDuel and DraftKings — are dominating everyone, everywhere.
And, to absolutely no one’s surprise, New York is no different. The Big Dogs of online sports betting generate more than half of the handle (amount gambled) and reported revenue in New York, and estimating it at 50% is being generous to the other seven operators.
In March alone, FanDuel Sportsbook NY and DraftKings Sportsbook NY combined for $1.39 billion in handle, representing about 73.4% of the market. On the revenue side, their combined total of $121.84 million equates to around 80.3% of the bottom line.
Second full fiscal year sees 21% growth in state tax revenue
Speaking of revenue generation, the state of New York has seen a lot of green since the launch of online sports gambling. Since January 2022, taxes from online sports wagering revenue have added more than $1.8 billion to the State Education Fund.
In the first full state fiscal year (April 1, 2022, to March 31, 2023), online sports betting generated $743.98 million for the SEF. Between April 1, 2023, and March 31, 2024, NY sports betting apps were responsible for contributing $898.5 million to the education fund.
That is a 20.8% year-over-year increase in tax revenue collected by the state without having to raise taxes anywhere. Do you think that may be something that caught their attention in Albany?
Newcomer Fanatics making up for lost time, ESPN Bet looks to do the same
As the New York online sports betting market continues to grow, new players are entering the game. Or trying to.
Fanatics Sportsbook NY, the gambling division of the sports merchandising and apparel giant, made a splash in 2023. After buying up PointsBet’s US assets, Fanatics had an easy backdoor entry into the extremely attractive NY sports betting market.
To date, Fanatics has capitalized on the opportunity. It has outperformed PointsBet during its relatively brief time in NY. Since first becoming PointsBet, a Fanatics Experience late last year – and then officially becoming Fanatics in late February – the license has generated an average of around $41.9 million in handle, including $53.2 million in March. Compare that with the $31.4 million under the PointsBet flag.
In terms of NY sports betting revenue, Fanatics has averaged a little over $2.6 million per month, including $3.8 million last month, the best ever under the license. Before, PointsBet averaged about $1.9 million.
There are nine available mobile sports wagering licenses in NY, and all are currently accounted for. Except Wynn (as mentioned above) decided to take its ball and go home. So its license is, technically, still active although it is not being utilized.
ESPN Bet, a partnership between the Worldwide Leader in Sports and PENN Interactive, is eyeing the Big Apple like a slice of pizza from Two Brothers after a night of partying in Midtown. It would love to move on Wynn’s inactive sports wagering license.
With FanDuel and DraftKings toying with the competition at this point in the post-PASPA era, NY could prove to be an important battleground state for operators like Fanatics and ESPN Bet NY to claw back market share.
