For New York State Senator Joseph Abbaddo Jr., the long drive is almost over, and the goal line tantalizingly close.
Starting in 2019, the senator carried the ball for mobile sports betting in the state, but got little to no support from former governor Andrew Cuomo, who was steadfast in his opposition to the industry. It took Covid-19 and a decimated state budget to persuade Cuomo that mobile sports bets were worth the gamble.
On April 19, as part of the state 2022 budget, Cuomo signed mobile sports betting into law. And on November 8, the New York State Gaming Commission chose nine operators to be licensed through two groups.
“The ball is not across the goal line yet,” Addabbo told GGB News. “But we’re closer.” He hopes mobile sports bets will be live in time for the Super Bowl on February 13, 2022.
One group of licensees, with FanDuel as the applicant, also includes DraftKings, BetMGM and Bally’s Corp. The second group includes five operators—Caesars Entertainment, Wynn Resorts, PointsBet Holdings, Rush Street Interactive and Resorts World—under technology provider Kambi Group.
They apparently feel that New York State, with its population of 20 million, will be so lucrative that even a 51 percent tax rate won’t deter profitability.
A new study from BonusFinder suggests New York could be the largest gaming market in the U.S., despite its heavy tax rate. BonusFinder serves as a marketing partner for casinos and sportsbooks that use bonuses to attract new players. The firm’s recently published Bonus Index indicates that a large population, competitive market and high bonuses will combine to offset New York’s tough tax regime.
“New York will become the U.S. sports betting market’s most lucrative and consumer-friendly state,” states the index, which launched just 24 hours after New York named its chosen licensees. The index measures a wide variety of factors—not just the pool of potential bettors but betting volume and average bonus offerings across all licensed brands—to calculate an overall Free Bet index score.
“The Bonus Index is able to accurately plot and track how successful every North American state sports betting and casino market is month on month,” said Fintan Costello, BonusFinder managing director. “New York is one of the U.S. sports betting market’s crown jewels: a large state with millions of passionate sports fans and bettors.”
It will be a buyers’ market, at least to start, he said. “The convenience for consumers and the number of licenses issued means operators will be competing hard for accounts. And that means (prospective bettors) will be presented with some of the country’s most competitive bonuses.”
The higher bonus offers for players include a predicted average welcome offer of $1,500 with a low of $550 and a high of $5,000, according to BonusFinder calculations.
After the licensees were announced, Penn National CEO Jay Snowden remarked, “I don’t think a single operator will make money in New York” due to the tax rate. That company was spurned in its bid to enter the market.
But the selected sportsbooks hope the population size will mean more business for everybody.
“Bigger brands will do well as they do in other states,” Costello said. “Land-based casinos offer synergies. We see New York as a taste-maker, with operators fighting for title ‘King of New York.’”
“More skins mean more competition,” Addabbo said. “I do like our product, and they represent the top-tier quality within the industry. … We’re on a good path, we have the potential of really doing well, and we’ll do what we have to make it better. Let’s see how it goes. The point is, we’re not going to stand idle.”
The licensees must next partner with casinos to house their servers. If approved by the Gaming Commission, they will have to pay an initial $5 million entry fee.
After that, mobile books will have to convince New Yorkers accustomed to crossing the border to Jersey or Pennsylvania to bet at home. “We want them to switch and stay with us,” said Addabbo, “but if we don’t have competitive, great products, they’ll go back to New Jersey from day one.”
Standing Out in the Crowd
It can be hard to differentiate among similar product offers. Odds may differ, and one sportsbook may be easier to use than others. People will pick brands based on customer service, welcome bonuses and retention bonuses, but how much will operators have to invest in customer acquisition? And how many customers have to bet before anyone makes money?
That answer is unknowable, but sports betting is a key first step that may unlock the larger market. Online casinos are the real money-maker, and the introduction of mobile sportsbooks may begin the natural progression to iGaming.
New York aside, Costello also has high hopes for sports betting in North Carolina and Maryland when those states go live. With so many competitors to choose from, he said, those states could eclipse even Michigan and Arizona. Interestingly, he added, the Bonus Index shows that Ontario, Canada “will blow New York out of the water.
“It may have 6 million fewer people, but its large number of licenses across both sportsbook and online casino will see it become North America’s largest gaming and betting market.”
New York will have something to say about that. And then, of course, there’s California.