{"id":4124,"date":"2022-02-02T13:43:59","date_gmt":"2022-02-02T21:43:59","guid":{"rendered":"https:\/\/wagers.com\/staging\/4285\/?p=4124"},"modified":"2022-02-02T13:44:17","modified_gmt":"2022-02-02T21:44:17","slug":"new-york-moves-show-sector-in-flux","status":"publish","type":"post","link":"https:\/\/wagers.com\/staging\/4285\/news\/new-york-moves-show-sector-in-flux\/","title":{"rendered":"New York moves show sector in flux"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">The launch of PointsBet\u2019s New York offering this week, hot on the heels of BetMGM, means we now have six of the nine possible operators live in the Empire State with the seventh, WynnBet, set to go live before the Super Bowl.\u00a0<\/span><span style=\"font-weight: 400;\">But going by the comments from Bally chairman Soo Kim last month, the chances are high that the market will have to wait at least a couple of months before we see the eighth name added to the list.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">And with the pending Resorts World Bet offering yet to announce its launch plans, the time limit on getting the full complement looks to be open-ended.<\/span><\/p>\n<h3><b>Launched:<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Caesars, FanDuel, DraftKings, BetRivers, BetMGM, PointsBet<\/span><\/li>\n<\/ul>\n<h3><b>Yet to launch:<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">WynnBet, Bally Bet, Resorts World Bet<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Such delays may seem anomalous given what we know about the likely size of the New York market. The nation&#8217;s fourth-most populated state, it was always tipped to be a money-spinner, at least in terms of handle and gross revenues. <\/span><span style=\"font-weight: 400;\">The latest figures released Jan. 28 showed a total of $1.18 billion had been wagered in the first three weeks with a gross gaming revenue of $91 million.<\/span><\/p>\n<h2><b>Waiting on the sidelines<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">But it is the questions around the promotional environment and how that interacts with the high tax rate that helps explain the tentativeness of Bally, at least according to Kim on CNBC during a recent interview.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Asked by interviewer Contessa Brewer about New York, Kim said the market as it was playing out in the first few weeks was \u201cinsanity.\u201d\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cI think it\u2019s kind of funny, and without casting aspersions on colleagues in the industry, you can literally open an account with one person, open an account with another person, bet differently on each one, and you will win on one of them. I don\u2019t know why everyone\u2019s not doing that,\u201d he said.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">He added for good measure that because of the \u201chighest tax rate in the country\u201d and with only nine possible competitors that the market around promotions would have been \u201cmore reasonable\u201d.<\/span><\/p>\n<h2><b>New York causes a rethink<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">That is not the case. But Bally&#8217;s isn&#8217;t the only one who has looked at how the New York opening has played out and changed their outlook on the market.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It is no coincidence that another New York licensee, WynnBet, is reportedly up for sale at this point. <\/span><span style=\"font-weight: 400;\">Even before New York, outgoing Wynn Resorts CEO Matt Maddox had made similar comments about the unsustainability of the OSB market, citing it as a reason for the company to pull back on its ambitions in the space.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Meanwhile, Rush Sports Interactive &#8211; or certainly the company\u2019s shareholders &#8211; will no doubt also be hoping to improve on the initial results for their BetRivers business, and speaking to Wagers.com, CEO Richard Schwartz said the company was taking a long-term view.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">&#8220;As the New York mobile sportsbook market matures over time, we are confident that the BetRivers user experience and award-winning customer service will earn player loyalty as it has done in other markets,&#8221; Schwartz said.<\/span><\/p>\n<h2><b>The distortion caused by heavy promotions<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">An issue identified in a report from the analysts at Deutsche Bank last week is how the levels of promotions and free bets have the potential to lead to a misleading impression of the success of many sports betting markets.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The team pointed out that in Pennsylvania, for instance, promos accounted for ~37% of the GGR total. This figure rose to 47% in the first two months of operation of the Connecticut market, 53% in Virginia, and a whopping 62% in Michigan. <\/span><span style=\"font-weight: 400;\">Indeed, in this last instance, in the first month of operation in January last year Michigan &#8220;broke the buck&#8221; on free bets. The Michigan Gaming Control Board effectively stopped counting after the 100% of GGR mark was reached.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">That might be nothing in New York. The state\u2019s Gambling Commission doesn\u2019t record the level of promos and free bets in its figures for handle and GGR but we know from the marketing efforts of the early market leaders that the level of free bets has likely hit an all-time high for any new market.<\/span><\/p>\n<h2><b>Don\u2019t trust the numbers<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Which means those early figures are to be doubly distrusted. First, they are of course truly early days. But more importantly, as one source put it to Wagers.com, the data \u201cdoesn\u2019t reflect market share for real-money wagered or revenues generated from customers.&#8221;<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cPlayer bonuses and free bets awarded are included in the calculations for the Gaming Commission\u2019s published handle and gross revenue figures so the more bonuses a NY operator issues to players, the larger their handle and gross revenues \u2018market shares\u2019 appear.\u201d<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The reality, then, is that the NYSGC figures don\u2019t accurately reflect customer spending. Or as the source suggested, it\u2019s not \u201creal revenues generated from customers&#8217; wallets\u201d.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">There will be a degree of satisfaction among the top three in New York that they have managed to grab early outsized market shares.\u00a0<\/span><span style=\"font-weight: 400;\">Caesars, in particular, will doubtless be happy to have staked out its claims with a 45.7% market share in the first three weeks.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">But we can also forgive those who might have some queasiness about how it managed the feat.\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The launch of PointsBet\u2019s New York offering this week, hot on the heels of BetMGM, means we now have six of the nine possible operators live in the Empire State with the seventh, WynnBet, set to go live before the Super Bowl.\u00a0But going by the comments from Bally chairman Soo Kim last month, the chances [&hellip;]<\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","footnotes":""},"categories":[324],"tags":[938,939,643,590,640,2,594,940,19],"class_list":["post-4124","post","type-post","status-publish","format-standard","hentry","category-news","tag-bally-bet","tag-betmgm","tag-caesars","tag-draftkings","tag-fanduel","tag-new-york","tag-pointsbet","tag-resorts-wolrd-bet","tag-wynnbet"],"_links":{"self":[{"href":"https:\/\/wagers.com\/staging\/4285\/wp-json\/wp\/v2\/posts\/4124","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/wagers.com\/staging\/4285\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/wagers.com\/staging\/4285\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/wagers.com\/staging\/4285\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/wagers.com\/staging\/4285\/wp-json\/wp\/v2\/comments?post=4124"}],"version-history":[{"count":4,"href":"https:\/\/wagers.com\/staging\/4285\/wp-json\/wp\/v2\/posts\/4124\/revisions"}],"predecessor-version":[{"id":4133,"href":"https:\/\/wagers.com\/staging\/4285\/wp-json\/wp\/v2\/posts\/4124\/revisions\/4133"}],"wp:attachment":[{"href":"https:\/\/wagers.com\/staging\/4285\/wp-json\/wp\/v2\/media?parent=4124"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/wagers.com\/staging\/4285\/wp-json\/wp\/v2\/categories?post=4124"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/wagers.com\/staging\/4285\/wp-json\/wp\/v2\/tags?post=4124"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}