In the two years since New York began allowing people to legally place wagers on their phones and computers, legal sports betting in the Empire State has exceeded anyone’s wildest expectations.
Consider that online sports betting in New York has attracted more than $35 billion in legal bets, generated over $3 billion in revenue and contributed nearly $1.6 billion in taxes since January 2022, according to data from state gaming regulators.
For context, exactly one year before NY mobile sports betting went live, former Gov. Andrew Cuomo estimated the industry could create an additional $500 million per year in taxes.
That success has significantly increased the chances that lawmakers in Albany will eventually legalize online casinos. Some lawmakers and industry experts believe online casinos in NY could generate close to $1 billion annually for state coffers.
But, for now, New Yorkers can be content knowing they are responsible for the largest and most lucrative legal sports betting market in the United States. And they did that in just 24 months.
NY sports betting rewriting record books in real time
The New York sports betting market has accomplished feats and set records that even the granddaddy of them all, Las Vegas, could not imagine.
Although New Jersey was the first state to ever report a monthly handle — the total amount wagered — of more than $1 billion (October 2021), NY quickly set the standard. Only three times (July 2022, August 2022, July 2023) have sports gamblers in New York failed to spend more than $1 billion in a single month.
In 2022, NY became the first legal sports betting jurisdiction to report $10 billion or more in annual wagers.
Of course, NY rewrote the record books in 2023. In October, the nine online sportsbooks in New York collectively handled $2.06 billion, becoming the first legal jurisdiction to reach the milestone. They backed it up by doing it again in November ($2.1 billion) and December ($2.04 billion).
All told, NY online sports gambling attracted more than $19.1 billion in bets last year. That is more than 26 other jurisdictions (25 states and Washington DC) have done in their entire lifespans, some of which are five years old.
Sportsbooks in New York have obviously benefitted from being able to offer their product in the Empire State. Despite having one of the nation’s highest tax rates on gross gaming revenue (51%), NY sportsbooks have outperformed their operations or counterparts in every other state except New Jersey and Nevada.
Again, in just two years.
Two top dogs in US doing the same in NY
FanDuel and DraftKings, the two preeminent sportsbook operators in the US, are also the dominant forces in NY.
In 2023, FanDuel Sportsbook NY rewrote the record books in terms of what legal operators are capable of. In January, FanDuel became the first operator to handle $700 million, according to the NYSGC data. When football season was back in full swing, FanDuel eclipsed $800 million in monthly handle in October. The following month, FanDuel reported a handle of $900 million.
By year’s end, FanDuel had reportedly taken in more than $7.8 billion in wagers by itself, more than all operators combined did in Ohio or Maryland last year.
Based on regulator data, Big Apple-based FanDuel controls nearly 41% of the NY online sports betting market.
Boston-based DraftKings is also making its presence felt in “enemy terrority.” In the summer, when betting activity is typically slowest, DraftKings Sportsbook NY managed to overtake its main competitor several times in both handle and revenue. In 2023, the sportsbook reportedly handled over $6.8 billion in legal bets. Massachusetts reported less than $5 billion for the entire year.
In 2023, DraftKings controlled just under 36% of the NY market.
The two giants did well in the NY sports betting revenue department last year as well. FanDuel posted annual revenue of $815.1 million, while DraftKings generated nearly $571.8 million.
Follow the (tax) money
However, the biggest winner in the online sports betting game remains the state government, which collects taxes on gross gaming revenue.
Why? Well, online sports betting in New York generated more than $861.8 million in taxes in 2023.
By comparison, New Jersey, which has had legal online sports betting since the summer of 2018, has collected just under $500 million in lifetime taxes. Nevada, which had legal sports betting decades before anyone else, has only collected around $145 million in taxes in the last five years.
In just two years, New York has left everyone in its dust, racking up an astounding $1.55 billion in state tax revenue.
What’s next?
“Over the last two years, New York is the clear leader in providing responsible entertainment for millions while bringing in record-shattering revenue for education, youth sports, and problem gambling prevention,” Gov. Kathy Hochul said in a statement.
“I look forward to this third year of our successful gaming policies that deliver top tier mobile sports wagering experiences. We will continue to generate revenue that will enrich the lives of New Yorkers, all with important safeguards in place to help those who need it.”
