New York sports betting achieved a significant milestone as the second state to reach $2 billion in operator revenue and the first state to generate $1 billion in tax revenue.
New York Towers Above the Rest
Neighboring New Jersey may have been the first to reach the $2 billion threshold in sports betting operator revenue but that’s only because they have been offering mobile betting to their residents, and anyone within their borders, since August 1, 2018.
Compare that to New York’s mobile launch in January of 2022 and it’s easy to understand why the Garden State reached that milestone first. However, New York is the busiest sports betting market in the nation and its 51% tax is tied with New Hampshire as the highest in the industry.
Therefore, it makes sense that the Empire State was the first to collect $1 billion in sports betting taxes, as New Jersey levies only a 14.25% operator tax. There was much debate as to whether New York’s prodigious tax rate would be detrimental in the long run but it’s hard to argue with the results thus far.
When mobile sports betting was being discussed, then-Governor Mario Cuomo recognized the enormous tax revenue possibilities in a statement that read in part, “New York has the potential to be the largest sports wagering market in the United States, and by legalizing online sports betting we aim to keep millions of dollars in tax revenue here at home, which will only strengthen our ability to rebuild from the COVID-19 crisis.”
Books Stomp the Public in May
The New York State Gaming Commission reported $152.6 million in sports betting revenue for May which was buoyed by an 11.2% hold of the $1.36 billion wagered in the state last month.
FanDuel became the first mobile sports betting operator to reach $1 billion in gross revenue in New York while adding nearly $76 million in May with a record-breaking win rate of 13.5% on its $561.4 million handle. The sports betting giant was responsible for over half of New York’s sports betting revenue generated in May, a feat the company has accomplished twice already this year.
DraftKings was the only other sports betting operator to post a double-digit hold in May and their $47.7 million in revenue was derived from a $471.1 million handle and a 10.1% hold rate. Caesars Sports delivered $13.9 million in revenue on $162.9 million in total wagers by posting an 8.5% win rate while BetMGM tallied over $8.9 million from its 9.4% hold rate on $93.8 million.
BetRivers improved its hold rate dramatically in May compared to the previous month in which their 9% hold rate was seven points better than the previous month. The company accepted $35.9 million in sports bets which generated $3.2 million in revenue.
Overall, the sports betting market in New York continues to be the most robust in the nation and despite the operators’ pleas to reduce the onerous 51% tax on revenues, it’s tough to envision how they will get their wish based on the state’s explosive numbers.
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