New York, the nation’s fourth-most populated state and home to the center of its largest metropolitan area, is set to launch legal statewide mobile sports wagering Jan. 8. If projections hold, it could be America’s highest-grossing sports betting market by handle and tax revenue.
First New York sportsbook wave begins
BetRivers, Caesars, DraftKings and FanDuel were cleared by regulators Thursday to launch their respective mobile sportsbooks on New York’s go-live date, paving the way for four of the state’s nine approved operators to start taking bets by the upcoming weekend.
DraftKings and FanDuel are the nation’s largest sportsbooks by market share. Those two, plus BetRivers’ parent company Rush Street Interactive, are the only operators permitted to offer mobile wagering in the tri-state area of New York, New Jersey and Connecticut.
Meanwhile Caesars has marketed aggressively since it finished integrating the former William Hill brand. The company has plans to spend $1 billion in free bets and other promotions and intends to fight with DraftKings, FanDuel and BetMGM atop the nation’s market share rankings.
BetMGM was perhaps the most notable company not included in Thursday’s initial launch roster. The nation’s No. 3 sports betting operator by market share (and No. 2 by combined sports betting and online casino gaming) earned one of the nine mobile licenses along with the aforementioned operators along with Bally Bet, WynnBet, PointsBet and Kambi (in conjunction with Resorts World). The New York Gaming Commission did not give a launch timeline for any of the remaining operators.
It appeared Thursday regulators approved the four online sportsbooks cleared for Saturday’s launch due to relationships with brick-and-mortar casinos. New York’s 2021 sports betting law required each operator to partner with one of the state’s commercial or tribal casinos and, with DraftKings, FanDuel, Caesars and BetRivers all already operating retail books in the state, the affiliations seemed natural.
That may not have been the case, sources told Wagers.com. Aside from Rush Street’s BetRivers Casino in Schenectady, the other trio are just partners, not operators. The (comparatively) remote location of the the casinos from the New York City metro area compelled DraftKings, FanDuel and Caesars to partner with Resorts World Catskills for their server partner, sources said. In that scenario, it wouldn’t seem to make sense that server partnerships were the deciding factor; if Resorts World had already agreed to house servers from its competitors, why wouldn’t it have done the same for its sportsbook already?
Future for New York sports betting
This leaves the launch criteria – and timelines – for the remaining five books unclear.
MGM, which owns Yonkers Raceway & Empire City Casino, has invested millions in the facility and New York overall. MGM is a favorite to obtain one of three downstate, full-scale casino licenses officials will grant as early as this year but it remains to be seen what role that has on its sports betting server logistics or a possible launch.
The remaining New York operators are all comparatively smaller in both handle and national prominence:
- PointsBet, an Australian-based company that has expanded rapidly in the U.S., has not been able to compete on the same level as more established U.S. daily fantasy sports (DraftKings, FanDuel) or casino operators (MGM, Caesars)
- WynnBet, itself the subsidiary of a well-known U.S. casino brand, launched its mobile sportsbook later than the aforementioned companies. Officials have already said they will curtail spending and not try to compete with the massive cash burn undertaken by current market share leaders
- Bally Bet is still completing the integration of its tech platform, and officials from parent company Bally’s have waited for completion before what they say will be an aggressive push in New York and virtually all other eligible U.S. markets
- Meanwhile Resorts World has never had a digital sportsbook under its own name and it remains to be seen if, when or how it and partner Kambi will promote its mobile book
Bottom Line
New York’s 51 percent tax rate on gross gaming revenue, the highest tax on any competitive U.S. sports betting market, did little to stop many of the nation’s top sportsbook from applying for licensure. New York’s goal of $500 million in annual sports betting tax revenue (which would mean roughly $1 billion in annual operator revenue and more than $10 billion in annual handle) begins Jan. 8.
Worth Noting
Saturday’s scheduled launch allows New York to capture the entirety of the NFL playoffs, including the Super Bowl, perennially the nation’s most wagered-upon single sporting event. New York bettors will also have four legal options to bet on the 2022 college football national championship, as well as the second half of the NHL, NBA and men’s college basketball seasons.
