Online sports betting will be launched in the state of New York this Saturday following final regulatory approvals of betting platforms and operational setups.
The New York State Gaming Commission (NYSGC) has confirmed that the first four out of nine licensed operators – Caesars Sportsbook, DraftKings, FanDuel, and Rush Street Interactive – have been approved to begin accepting and processing mobile sports betting in the Empire State from January 8, 2022, at 9am EST.
The remaining five conditionally licensed operators – BetMGM, Bally’s, Wynn, Resorts World, and PointsBet – will continue to work towards satisfying statutory and regulatory requirements necessary to launch and will be approved on a rolling basis when requirements are met.
Upon issuance of the 10-year licenses, which have a $25m fee attached, in November 2020, regulators deemed that permits would not be granted to Penn National, bet365, theScore Bet, Fox Bet, and Fanatics.
Better Collective
Better Collective has entered into partnership agreements with three of the four approved operators and is in dialogue with the fourth. The firm says it is ready to support the New York sports fans with betting lines, sports information, and statistics on its proprietary platforms including Action Network and Vegasinsider.
Marc Pedersen, CEO of Better Collective US, said: “Unlocking the fourth most populous state in the United States to mobile sports betting is a huge moment for Better Collective and our growing portfolio of US assets. We are strongly positioned and excited to continue delivering sports betting content to the many thousand sports enthusiasts from New York that visit our sites daily.”
DraftKings
In August 2019, DraftKings opened a retail sportsbook in Waterloo, NY at del Lago Resort and Casino, featuring LED video screens, a bar and restaurant, ticket windows, and 23 self-service betting kiosks that emulate the look and feel of the DraftKings Sportsbook app.
Commenting on the upcoming New York market launch, Jason Robins, CEO, Co-Founder, and Chairman of the board, DraftKings, said: “We are excited to finally be able to offer millions of passionate New York sports fans the top-rated DraftKings mobile and online Sportsbook.
“We want to extend a special thanks to Governor Hochul, Senator Addabbo, Assemblyman Pretlow, the New York Gaming Commission along with the tireless efforts of our dedicated DraftKings team for making this a reality.”
Kambi CEO Kristian Nylén stated on the New York launch: “We are excited to launch online in New York State this weekend, along with our partner Rush Street Interactive, which marks another significant milestone in the growth of Kambi.
“Being selected to operate in New York by the New York State Gaming Commission underlines the high quality, integrity, and reliability of Kambi’s sports betting technology and I’m delighted that Kambi will be up and running on day one of the market, in time for the business end of the NFL season.
“New York is among the most populated and sports passionate states in the US and will no doubt be one of the largest regulated wagering markets in North America, one we are both excited and honored to be playing a leading role in.”
Rush Street Interactive
Rush Street Interactive’s CEO Richard Schwartz gave thanks to the NYSGC for its professional and efficient support, stating: “The long-awaited launch of online and mobile sports betting in New York – the largest online sports betting market by population in the United States – is here, and just in time.
“With the college football championship game on January 10 and NFL playoffs approaching, and the NBA and NHL seasons in full swing, in addition to countless other sports and betting options available for play, fans have endless entertainment at their fingertips at BetRivers.”
Market Projection
According to PlayNY, which tracks the New York gaming market, the Empire State has a tough task of reaching the original forecast of $500m in annual tax revenue by the fiscal year 2024 that supporters of legalizing online sports betting projected.
Former Governor Andrew Cuomo’s administration budgeted for proceeds from online gambling to achieve $99m in FY 2022, $357m in FY 2023, and $500m by FY 2024, easily the most ever for one state.
Eric Ramsey, a data analyst for the PlayUSA.com Network, which includes PlayNY.com, says the New York market will be highly lucrative for the state but will fall short of being a $500m windfall by the market’s third year.
Ramsey commented: “For New York to reach $500m in annual tax revenue, it will take a groundswell of demand that would be unprecedented in US sports betting history. New York will be unique in its size and structure among US sports betting markets, so it would be unwise to say it’s impossible. But hitting that goal by Year 3 is probably overly optimistic.”
With a 51% tax rate, operators collectively in New York will need to hit $1bn in gross gaming revenue for a $500m tax revenue, something which has never been accomplished by a US market over a single year. Assuming operators will “hold” an average of about 7.5% of all wagers, operators would need to handle more than $13bn in bets over a year to reach the official projections.
Even if New York fails to hit $500m, sports betting will almost certainly generate more in tax revenue than any other state. If the state meets neighboring New Jersey’s level of around $11bn annually, it could create more than $400m in tax revenue.
Ramsey continued: “New York’s model might end up being the right choice for the state, even if it can’t be successfully replicated in most other places.
“Bettors will have a variety of sportsbooks to choose from, fostering a healthy market and competitive pricing. And given the allure of the New York landscape, operators proved themselves willing to pay taxes at a rate typically reserved for much smaller monopoly markets.
He concluded: “There are tens of billions of wagering dollars waiting to be captured in New York, but the question remains whether operators can capture enough to reach the budget projections.
“To reach those lofty goals, New York’s nine operators will have to offer a competitive enough experience to compete with neighboring states, offshore sites, and neighborhood bookies despite the high tax rate. Will it be enough? We shall see.”
