Is the honeymoon over? Well, Maybe. The relationship between New York bettors and New Jersey sportsbooks lasted almost four years. During that time, New Yorkers who wanted to bet on sports without driving upstate to a casino crossed the Hudson to bet in New Jersey on the mobile devices, according to Politico.
Earlier this month, New York entered the online market and took in unprecedented amounts of money, and not just from those New Yorkers who previously went to New Jersey to bet on the Jets or Giants. Sportsbook operators spent massive amounts of money and offered big incentives to get people betting just as the NFL playoffs began.
In its first weekend, four online sports operators report a handle of $150 million in wagers, and 650,000 unique player accounts were set up, expanding to 1.2 million by the end of the first week, according to GeoComply, a software provider that ensures location for sports bettors. More than New Jersey and Pennsylvania combined.
Population differential alone means New York should take the crown away from New Jersey, a crown held since 2019.
“With a product as we have, I would expect we leapfrog over New Jersey,” said New York State Senator Joseph Addabbo, who sponsored the sports betting measure in New York. “But it is about sustainability and the long term.”
New Jersey operators took in $1.3 billion last October, setting a national record. All but $100 million came from online wagering.
Now it’s New York’s turn.
GeoComply found that just 9 percent of New York players had placed bets previously in New Jersey and that nearly 88 percent of New York customers were brand new to the sites.
New Yorkers placed a record-shattering $603 million in bets during the launch of mobile sports gambling, according to initial figures released by the state Gaming Commission. New York generated $48.2 million in gross gaming revenues from January 8-16, which translates to $24.6 million for the state.
By comparison, New Jersey previously set the U.S record for bets in a month with $1.3 billion in October, or about $41.9 million in sports wagers per day, PlayNY said.
“Betting volume is outstripping even the most optimistic projections so far. Some of this is enthusiasm over finally getting mobile sports betting,” said PlayNY.com analyst Mike Mazzeo.
Gaming Commission spokesman, Brad Maione said, “We have been pleased with the handle [amount wagered], which indicates interest in mobile sports wagering and accessibility to the licensed providers.”
Caesar’s Sports Book led the pack, posting $257.7 million in bets, generating $22.7 million in gross revenues.
FanDuel recorded $200.4 million in bets and $14.1 million in revenues.
Draft Kings reported $134.4 million and $10.9 million in revenues.
BetRivers enticed $10.6 million in wagers and $446,696 in revenues.
“The momentum of New York’s sports betting launch has continued, and it is mostly homegrown,” said Lindsay Slader, the company’s managing director of gaming, in a statement.
New Jersey averaged 12.6 million transactions the two weekends before New York’s launch and 13.1 million the two weekends since, the company said.
The maybe part shows that New Jersey averaged 500,000 more transactions the first two weekends after the launch of New York than the two weeks prior
“New York’s launch of mobile/online sports betting is likely to only impact patrons living close enough to the New Jersey border to make travel from New York to New Jersey for the purpose of wagering convenient,” said Jane Bokunewicz, the faculty director at the Institute of Gaming, Hospitality and Tourism at Stockton University in Galloway, N.J., in an email.
New York expects tax revenue to grow from $375 million in coming fiscal year to $518 million by 2027.
Still, New Jersey said it is well-positioned to stay competitive with New York for one key reason, in particular: taxes. New York’s tax rate on mobile sports betting providers is 51 percent, among the highest in the nation, compared to 14.25 percent in New Jersey.
In 2021, internet gambling and sports betting accounted for 46 percent of the total gaming revenue in New Jersey, putting it nearly on par with all the revenue the casinos brought in from traditional gaming.
The biggest impact so far has been in the physical sportsbooks in New Jersey. Attendance has been down at the Meadowlands Racetrack sportsbook, a mere 10 miles from midtown Manhattan and by far the largest one in the state.
Owner Jeff Gural, who also owns a sportsbook and horse track in the Southern Tier region of New York, said he expected more of a hit on the mobile side of the business rather than the in-person toll side at the Meadowlands.
“I think we have to see what happens six months from now when all the free money disappears,” Gural said.
In related news, PointsBet is live and in play in New York, the sixth mobile sportsbook. They took their first bet just after 10 p.m. on January 24. New York marks the ninth state for PointsBet, with Pennsylvania coming up next. PointsBet promoted a pre-registration offer with up to $2,000 in “risk-free bets,” along with an offer for an additional $100 in free bets.
When PointsBet submitted a bid proposal to the New York Gambling Commission back in July, the Australian company touted its partnership with NBC as a main selling point for why it deserved a betting license.
PointsBet and NBC will feature localized programs designed to attract New York sports audiences. In July, former NFL All-Pro quarterback and NBC Sports announcer Drew Brees received an equity stake in PointsBet when he became a brand ambassador for the company.
Brees is a studio analyst on NBC’s Football Night in America pregame show.
“In addition to rare opportunities such as brand placement within Football Night in America and Sunday Night Football on NBC and access to audiences consuming Peacock, PointsBet will be able to leverage local and regional assets to reach millions of households in New York,” the company wrote in the bid proposal.
On January 15, PointsBet completed a test run of its “Always On” in-game betting platform during the wild card round game matchup with the Bengals and Raiders. During the game, PointsBet offered live, in-play betting opportunities,
PointsBet became the first major U.S. sportsbook to offer in-game wagers without suspending the bets, according to the company. Despite the in-game advances, PointsBet has been criticized by some bettors on Twitter for lengthy bet acceptance delays and the rejection of some futures bets on tickets as low as $100.
As of January 17, 1.2 million people signed up for an account in New York since January 8. The accounts spread over five sportsbooks in the state with 878,000 unique bettors, according to GeoComply.
In related news, New York Governor Kathy Hochul wants to accelerate the process of selecting three casinos within the greater New York City area. Two of those three may have a lock as they already offer something like a casino with video lottery machines, one in Queens and the other in Yonkers.
Hochul plans to eliminate the 2023 starting date for downstate casinos and accelerate the licensing. The plan would create a gaming facility location board to review applications for licenses for full-scale, Las Vegas-type casinos.
Hochul’s budget document states “it is expected they would provide a substantial amount of revenue for state education aid through license fees and recurring tax payments.”
“The release of the executive budget by Governor Hochul presents a fiscal path forward for New York State during these difficult times,” said Joseph Addabbo, Senate Racing and Wagering Committee chairman. “I believe the inclusion of expediting the three full casino licenses for our downstate region has the potential to bring in $1.5 billion in revenue for the state, additional educational funding and improvements to problem gambling programs.”
Factors include ease of access for gamblers and a community’s willingness to become home to one with all the potential benefits and potential damage, including traffic, gambling addiction and crime.
“I’m definitely and have always been, in favor of accelerating downstate casinos,” said Gary Pretlow, the chairman of the Assembly Racing and Wagering Committee. “The issue is, however: where they would go?”
“There has been a lot of talk about a casino in Manhattan,” Pretlow said. “If there was one there, it would probably be the most lucrative casino in the world.”
But local opposition and inability to deal with the travel and tolls, make New York City a risk.
There is no shortage of interest among operators, Pretlow said. Two casino companies already suggested they each pay $500 million for a license. Pretlow said the cost would be at least $750 million.
Addabbo says the process of selecting the three casinos in the greater New York City area needs to be “open and transparent and credible.”
Nothing is pre-ordained.
Yet one of the considerations the Senate Committee on Gaming, Racing and Wagering will look at is speed-to-market. In other words, New York wants to reap the revenue rewards this year. Addabbo, who chairs the committee, has not wavered from that position for months, according to Capital Tonight.
To accomplish that, it’s logical to assume the existing racinos in Queens and Yonkers have an advantage because the infrastructure is in place.
“It’s not predetermined, no. And I think most entities in the industry understand that,” he said.
During a committee meeting January 24, Gaming Association President Michael Kane said he believes upstate casinos will in support of the three downstate ones, even though there is potential of cannibalizing revenue.
“They don’t feel that there will be a negative effect. They feel that having a vibrant downstate gaming mecca can disperse somewhat through the rest of the state,” Kane said.
On mobile sports betting, despite the record setting pace of the first couple of weeks, Addabbo expressed some concern that once the incentives are removed, the numbers will slip.
“Our record-breaking first couple of weeks has been remarkable, but the key is sustainability,” he said. “New York has a great product, and it shows in the numbers.”
According to Addabbo, in one day, New York mobile sports betting made $3.7 million, which is more than the state made in two years with in-person sports betting.
