Legalized mobile sports wagering has been live in New York for a few weeks now and the market is already slated to surpass New Jersey in revenue generation. During the first 2 weekends of legal sports betting in New York, punters wagered at least $15o million, which is a testament to the high demand that has existed in the state. This means that New York could easily surpass New Jersey as the country’s most successful wagering market in no time.
GeoComply Solution released data that showed that New York gamblers wagered $17.2 million in transactions during the first week and 17.9 million during the second week of live-action. According to GeoComply, 1.2 million punters have created new betting accounts since mobile sports betting was given the official greenlight. Nearly 88% of the new registrants had never opened mobile sports betting accounts before, according to the Vancouver -based tech company.
This data indicates that New Yorkers are embracing sports betting as predicted. The data shared also indicates that punters in New York are foregoing the use of illegal offshore sportsbooks for the legal ones. Operators, on the other hand, are enjoying the competitive market that has allowed them to attract hundreds of first-time bettors.
The figures shared imply that while New York has a capacity to outgrow the New Jersey market in a few months, it still has not managed to knock out the Garden State from the lead. New Jersey averaged 12.6 transactions within its borders in the 2 weekends before New York launched its mobile sports betting market and 13. 1 million since.
Based on GeoComply’s tracking tools, approximately 9.3% of punters have registered accounts in both states. The growth in New York has so far been explosive and is by far already scheduled to be one of the most successful revenue generators in the country. Not only does it have one of the biggest populations of any state that enjoys legal sports betting, but New York also boasts several well-known major sports teams, which almost guarantees success.
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4 companies approved at first
The debut of New York’s sports betting market gives sports lovers in New York an instant opportunity to accumulate customers before the market gets too crowded. When the market launched, only 4 companies had been given the go-ahead to debut. The NY State Gaming Commission had approved DraftKings, Rush Street, Caesars Sportsbook, and FanDuel to start accepting wagers from January 8th.
By November 2021 though, the gambling authority in the state had already approved online sports wagering licenses for 9 operators. The other 5, namely Resorts World, Wynn Interactive, PointsBet, Bally’s, and BetMGM had received conditional licenses and will continue to be approved on a requirement basis. The legalization of sports wagering in New York has been long-awaited since the Supreme Court legalized sports betting in 2018.
Currently, 32 states have legalized sports betting in the country. However, only 18 have permitted mobile sports betting. Experts predict that New York’s sports betting market will hit $1 billion in yearly revenue according to analysts. Yearly revenue from taxes is expected to hit $500 million by the start of 2025 according to more reports.
Governor Cuomo legalized mobile sports wagering last year in April 2021. However, residents have always been allowed to place in-person wagers at brick and mortar sportsbooks for decades. The closest casino to New York City where one can wager in a physical space is Resorts World Catskills, which is at least a 2-hour drive from the city.
This is why sports lovers have always preferred to cross the Hudson to gamble in New Jersey instead. For years, New Jersey has been generating an estimated 20% of its revenue from New Yorkers so it remains to be seen how the Garden State’s revenue will be impacted moving forward.
While the newly legalized market has offered exciting opportunities to both punters and operators, it comes at a price. For instance, sportsbooks in New York are taxed 51% of their gross betting revenue, which is very high compared to other markets. The basic range for taxes in the markets is 11%. The only other state with such a similar tax rate is New Hampshire which stands at 51%.
For the 4 sports betting operators mentioned above to gain first access in the state, they had to part with $25 million as a one-time licensing fee. However, despite such a high tax rate, the growth opportunities in the market cannot be overstated. The state is looking to take advantage of the revenue generated from legal sports betting to not only advance local and social programs and development goals but also to create a safer gambling environment for its residents.
Sports betting will continue to grow
As of last year, more than 12 states had already legalized sports betting, even though a handful of states only permit in-person betting. During the first weeks of sports betting in New York, DraftKings and FanDuel have established themselves as early market leaders but the other operators are expected to catch up soon.
In 2021, gambling operators in the US generated approximately $3.25 billion in total revenue from sports wagering. Approximately 20% of this revenue was generated from New Jersey, which has enjoyed legal sports betting for the longest time in the country. Moving forward, operators are crossing their fingers that sports betting will be legalized in other populous states, namely California and Texas.
If sports betting is legalized in these 2 states, analysts predict that sports wagering could climb to nearly $17 billion by the end of 2026. More states are realizing that a legal sports betting market is one of the best ways to raise tax revenue and create job opportunities, especially in the wake of the devastation that has been caused by the pandemic.
Final Thoughts
The effect of a legal New York sports betting market is sure to be a closely observed spectacle. New Jersey derives a small portion of its business from New York since states require gamblers to be physically located within their borders. So far, however, both markets seem to be reaping the rewards of a legalized market.
