Legal sports betting is officially days from launch in the sports capital of the world with the New York Gaming Commission confirming that four sportsbooks will be authorized to start accepting wagers as soon as 9 am this Saturday.
Caesars, DraftKings, FanDuel, and BetRivers (Rush Street Interactive) have all met the Gaming Commission's statutory and regulatory requirements to begin offering online and mobile sports betting in The Empire State.
It took more than a year of pushing from New York State Senator Joseph Addabbo but the state was able to beat his initial target start date of the 2022 Super Bowl. Not only will the state be live ahead of the Super Bowl, but will be live a full week ahead of the January 15 NFL Playoffs start date.
While Addabbo preferred a unilateral start date, he admitted that if a sportsbook was unable to meet the necessary requirements, it would be excluded from the launch.
“It would just be better for the consumer of New York, really, and the industry if we all got a single start date. Now if an operator is unable to meet that start date set by the gaming commission that’d be unfortunate for them. But it would be fair and also better for the consumer instead of a haphazard who can start, who can’t start.” - Sen. Joseph Addabbo
Ultimately, five operators (BetMGM, Wynn, PointsBet, Bally Bet, and Resorts World) will have to watch Saturday's launch. That being said, Addabbo is confident all nine operators will be live in New York for Super Bowl LVI.
Despite the state electing to not allow operators to deduct promotional spend from revenue, New Yorkers have already noticed a rush of ads and offers. In fact, sportsbooks have had early registration bonus offers available to New Yorkers for the better part of the last month. This is important to note as, according to VixioGambling Compliance, operators have deducted more than $336 million in revenue tied to these bonus offers, a deduction that will not exist under the current New York regulations.
Caesars Sportsbook, in particular, has been on a spending frenzy in the state with a J.B. Smoove-led TV campaign and a massive MSG deal that includes signage at the epicenter of N.Y. transit and exposure across the MSG Network.
Not only are operators not allowed to deduct promotional spend in New York, but will pay a 51% tax on all revenue in the state. Industry experts have called the exceptionally high tax rate a cause for concern for operators. While DraftKings currently pays a 51% tax in New Hampshire as well, they are the exclusive betting provider in the state.
Clearly, betting operators are betting on volume in New York. The state projects the industry to grow to an annual handle of $10 billion, with nearly $1 billion in annual revenue. Governor Cuomo's initial projections for the first fiscal year of legal wagering expected $357 million in tax revenue.
Addabbo has since walked back those projections, but does think the market will eventually outgrow New Jersey. The Garden State crossed the $10 billion mark for the first time in 2021 including a $1 billion+ handle in September, October, and November, while narrowly missing that mark ($996 million) in December.
How quickly New York can close the 3.5-year head start New Jersey has on them will be a topic of discussion over the coming years. As for Saturday, New Yorkers that have crossed the Hudson to bet for the past 3+ NFL seasons can stay home, and for those that haven't contributed to New Jersey's success, welcome to the party.