Almost a decade ago, the Empire State legalized sports betting at its commercial casinos. A law passed in 2013 allowed the construction of four commercial casinos in the upstate region.
The federal ban on sports wagers was repealed in 2018 by the Supreme Court.
The state watchdog on gambling and gaming approved preliminary betting rules and regulations on January 28, 2021.
Under this proposal, tribal casinos would be allowed to offer sports betting as well.
The law at the time did not cover tracks, racinos, and off-track betting (OTB).
In June this year, the state regulator formally approved sports betting regulations.
In January 2022, New York legalized mobile sports betting, and it went live. DraftKings, FanDuel, Rush Street Interactive, and Caesars were the first platforms endorsed to offer mobile sports betting.
With that, New York became the biggest state to make sports betting legal. It is also the one with the fourth-highest population in the US. When betting was legalized, it was largely not expected to garner much revenue due to the hefty 51% tax on gambling.
$302M in 6 months
Fast forward six months – in July, Governor Kathy Hochul announced New York had generated tax revenue in excess of $302 million from mobile sports betting since it became lawful. The state has earned more from mobile sports betting in just half a year than the total sports betting earnings in any other state. This includes gambling at physical venues and on mobile devices.
This revenue includes $25 million in license fees paid by mobile sports betting providers, coming to a total of $200 million. At the time of writing, there were nine sportsbooks in New York. The last one added was Bally Bet.
According to the Governor, the state will invest most of the revenue into education. Around $6 million will go toward gambling education, and almost $5 million will be used to fund sports programs.
In the two summer months, New York sports betting operators earned less than a billion from their activity. They rebounded in September with revenue of $1.26 billion. The gross revenue that month came to $143.3 million, which means the state got $73.1 million in tax revenue from the online sports betting companies on its territory. This is an all-time high in the country.
New York online sports betting companies earned just over $800 million in July and $872.2 million in August in the handle, dropping below $1 billion for the first time since the launch in January.
The king of New York has traditionally been NFL betting. It largely accounted for the increase as regular season games returned. Aaron Judge contributed to this, closing the season with 62 home runs and reaching a single-season record ahead of Roger Maris (61) and Babe Ruth (60). Judge attracted 150,000 bets, the highest number of any MLB player in the season. Pete Alonso was a distant second with half that number.
Tax Revenue of $615M Expected in FY2023
According to New York budget forecasts for the 2023 fiscal year, online sports betting will generate tax revenue of $615 million for the state. New York is on track with $307.3 million halfway through the fiscal year.
Operators are trying to convince legislators to reduce the tax rate, and an accurate budget prediction will make that more complicated, but they’re expected to keep trying.
Featured Image: SportsHandle