New York sets mobile sports betting benchmark: What it means for New Yorkers

Two weeks ago, New York marked the one-year anniversary of legal mobile sports betting by announcing that it generated far and away more revenue than any other state.

Governor Hocul announced that “through January 7, the total mobile sports wagering handle reached $16,595,732,482.” More than 3.8 million unique player accounts have been created since its launch, with over 1.2 billion transactions being made, and over $1.5 billion in total bets being placed.

That $16.2 billion in yearly handle (the amount of money wagered by bettors) set an industry benchmark, as did the $1.36 billion in total gross gaming revenue, and the $709 million in tax revenue.

New York mobile sportsbooks surpassed $1 billion in handle in 10 of 12 months during 2022, including $1.62 billion in December. New Jersey was the next closest with $998.39 million in mobile handle.

In order to legalize mobile sports betting in New York, the nine operators that were given permission to handle bets agreed to a 51% tax rate, the highest in the country, in addition to a one-time $25 million license fee to acquire market access in NY. Now that the calendar year is over, it’s possible that the state could reduce the tax rate for these sportsbooks, but that seems unlikely given the success of the past year.

Of the nine operators in New York, FanDuel was the dominant sportsbook, leading all operators with a 40% market share for a total of $6.5 billion and a 48% revenue share of $650.5 million. The “Big Four” operators of FanDuel, DraftKings, Caesars, and BetMGM combined for 93.3% of New York’s market share and 96% of the revenue share in 2022.

So what does this all mean for New York?

Photo Credit: Craig Dudek

According to Governor Hocul, for Fiscal Year 2023 (April 1, 2022 through March 31, 2023) and annually thereafter, revenue from mobile sports wagering will be distributed as follows: “$5 million to fund sports programs for underserved youths, $6 million to fund problem gambling education and treatment, with the remaining majority to fund education aid.”

At this time, it’s unclear exactly how much “the remaining majority” is and how it will be used to fund education aid.

Robert Williams, the Executive Director of the New York State Gaming Commission, said that the Commission is working with the New York State Office of Addiction Services and Supports (OASAS) to help combat potential gambling disorders as the state delves further into mobile sports betting.

“The introduction of mobile sports wagering as, by some, been pictured as opening New York to an ever-continuing scene of addiction,” said Williams at the New York State legislature hearing on Tuesday. “Research indicates that disordered gambling has been relatively a stable phenomenon over the last 40 years despite an unprecedented increase in opportunities and access to gambling.”

Williams cited further research which countered the belief that problem gambling can only be tackled through professional treatment. He cited that there are “many other pathways out of disordered gambling,” like Gamblers Anonymous, which he suggested could benefit from an increase in funding with some of the new revenue.

He also cited that an elevated prevalence in problem gambling can be found in adolescents and while more research needed to be done on why that could be the case or how to prevent that from carrying over into adulthood, he did mention that regulating gambling advertising is central to the concerns of the Gaming Commission.

“We believe the most significant portions of the American Gaming Association’s code require that sports wagering advertising and marketing not be designed to primarily appeal to those below the legal age by depicting characters or by featuring entertainers and music that appeals primarily to audiences below the legal age . And no operator’s logos, trademarks, or brand names should be used or licensed for use on clothing, toys, game equipment, or anything intended primarily for persons below the legal age for sports gambling.”

As New York continues to iron out the policies to protect its citizens and utilize the funding as effectively as possible, the state is moving full speed ahead with proposed increases to gambling opportunities.

State Assemblymember Gary Pretlow said he hopes to introduce bill language to allow for bets on individual player award futures such as MVP, Coach of the Year, and Cy Young, which are not currently allowed in New York but are in New Jersey.

“I want to add more opportunities to get closer to what they do in (New) Jersey. There are too many bets you can’t make. I want to include those type of things.”

However, New York appears unlikely to move off its ban on in-state college teams, with the hope that it will help to continue to reduce under-aged gambling.

Every Friday, the NYS Gaming Commission publishes weekly mobile sports wagering reports from all of its operators online here.

For more Sports betting news like this New York mobile sports betting article, visit amNY Sports

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