Sports betting in New York has grown to massive proportions and records are being broken almost as quickly as they are being set. March 2023 proved to be another betting bonanza between the staggering revenues generated at online sportsbooks and commercial casinos.
Empire State Towers Yet Again
March Madness, the Division 1 national college basketball tournament, reflects just how important college sports are to the overall optimization of online sports betting revenue. Thus, it was not surprising that it was the catalyst to another extraordinary month of betting revenues for the retail and online sportsbooks which pay a premium to do business in the state of New York.
A whopping $1.785 billion was wagered on sports via the nine licensed New York sports betting platforms in March which narrowly missed the sports betting handle record set in January 2023 of $1.788 billion. Yet, the hold or win percentage proved to be strong enough to dwarf January’s previous record of $149.4 million with an 8% increase of $162.8 million in March.
And because New York charges online sportsbooks a lofty 51% of their revenues, $83 million went to the state’s tax coffers. But the casinos were also heavily trafficked as evidenced by the $67.2 million they took in which includes retail sports betting, table games, slots, and poker revenues.
When the dust settled and the smoke cleared, New York did nearly $230 million in casino and online sports betting combined which proved to be over 23% better than in March 2022.
The commercial casinos reported the following numbers:
- Rivers Schenectady March 2023 gross revenue: $20.6 million
- Resorts World March 2023 gross revenue: $19.9 million
- del Lago March 2023 gross revenue: $15.8 million
- Tioga Downs March 2023 gross revenue: $10.9 million
Online Sportsbooks Losing Leverage
The onerous tax rate levied on online sportsbooks in New York coupled with the elimination of promotional deductions has caused the sportsbooks to ponder out loud whether the juice is worth the squeeze. New York, New Hampshire, and Rhode Island have the highest tax rates in the nation at 51% but sportsbooks are insisting that although the revenues are astounding, they may have to adjust the way they do business to remain profitable.
Limiting or even eliminating promotions such as free bets for new sign-ups or loyalty incentives such as odds boosts could likely be a direct consequence of the state legislature ignoring the pleas of the platform providers to lessen the tax burden.
Adjustments Will Be Necessary
FanDuel Group President Christian Genetski, citing a report from the Spectrum Gaming Group, which reported that New York’s sports-betting handle could fall as much as 10 to 20% year over year if things don’t change.
“As legal operators struggle to make the numbers work, they will not only reduce marketing and generosity, they may also be forced to adjust pricing in New York,” Genetski told the committee members. “That is how much it costs to make a bet, to ensure a higher hold percentage.”
DraftKings Chief Executive Officer Jason Robins bemoaned the lack of promo deductions in the New York market which he stated made the effective tax rate 70%.
“In a nutshell, we will likely be forced to offer a significantly worse value proposition for customers that are placing bets in New York,” Robins said. “This starts with the betting odds, where New York customers would receive worse odds than DraftKings offers in other states and that you can find in the illegal market.”
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