The first week of the football season resulted in a drop in the weekly sports handle of $33 million for New York State’s mobile sports betting market. The state gained more tax revenue as it increased for the week of September 18, 2022, despite the drop in volume. Nine private companies are allowed to operate in the jurisdiction of the state’s mobile sports betting market.
The tax rate for mobile sports betting in New York State is one of the most discussed issues in the local industry. The first week of the football season resulted in a drop in weekly sports handle of US$33 million. The state gained more tax revenue as it increased for the week of September 18, 2022, despite the drop in volume.
Nine private sportsbooks are allowed to operate in the jurisdiction because of the state’s mobile sports betting market. Nine companies have already surpassed a total of US$11 billion in online handle as of September 18, 2022, when the sector started. This has delivered over US$866 million in GGR and US$442 million in tax proceeds.
There was volume drops again
In the first few weeks of January, the market saw a tremendous amount of volume, with handle often exceeding US$400 million. The interest can be explained by the NFL playoffs, as the season is at its opening games. The drop-off in handle is due to the lack of welcome bonuses that were launched at the beginning of the market.
As the market has matured and there are no generous welcome bonuses, the nine sportsbooks are spending less on marketing and promotions. Operators claim that the state’s tax rate is one of the reasons for the lower interest in online sports betting. According to them, it affects the long-term road to profitability for their apps.
Assemblyman Gary Pretlow, one of the biggest lobbyists for online sports betting in the state, said this week that the lower volume is not surprising. In the beginning of the market operators were offering free play and matching play, which was also included in the state’s overall handle. That is the reason the handle is so low.
Mr. Pretlow said that because of the tax rate on revenue and promotions, operators are less likely to spend more money on promotions. He believes that there will be a decrease in handle due to the fact that money is coming from the local bettors and not necessarily from the licensed sportsbook apps.
There is also i gaming on the cards
In April of this year, Empire State lawmakers shared their plans to regulate online gambling. Financing bills were suggested to make it a legal option in the near future. Sen. Joe Addabbo had a proposal to have fixed-odds betting on horse races. He said that he would make the change a top priority in the budget discussions.
Some operators are concerned that online gaming could lead to the cannibalization of the land-based casino industry in the state. Mr. Addabbo assured that the introduction of online casino play will not affect brick-and-mortar amenities. The new offering will be tied to the state’s commercial venues, which is also the case with mobile sports betting.
Mike asked if online NY sports betting was broken while revenue was pouring in. The LegalSportsReport was published on September 29, 2022.