What a difference a day – and a new governor – makes. Andrew Cuomo had a difficult time accepting the inevitable arrival of mobile sports betting when he was governor of New York. However, once the brakes were released, everything changed. That couldn’t be more evident than the amount of action seen by mobile sportsbooks on January 8, the first day they went live.
New York Mobile Sports Betting On Fire
In just two days, mobile betting has become a huge success in New York. Residents rushed to their phones on Saturday morning to place bets on the day’s events after a bright, early start.
Four of the nine approved operators made their debut on Saturday. However, that didn’t stop players from flooding in. New York’s sportsbooks had a record of 5.8 million transactions within 12 hours of opening.
GeoComply, which is a geo-tracking security company, said that New York’s market activity in the first half of the day beat all other states by a wide margin. The state can gain a lot from the activity because New York was non-negotiable on its 51% tax rate.
Money Pouring into State Coffers
Wagers.com’s Ryan Butler estimated that $200 million was handled in the first weekend of online betting. These figures translate to roughly $10 million in sportsbook revenues and $5 million in state taxes.
In comparison, New York’s tax revenue from retail betting has only been $3.7 million over the past two fiscal years. Gaming regulators had predicted that annual revenues would surpass $1.1 billion by 2025 earlier this year. The state may see these numbers sooner than anticipated; however, due to the overwhelming success of the opening weekend.
The NFL Playoffs are yet to start, and the Super Bowl is only a few weeks away. New York’s next month will be a record-breaking month.
Nowhere to Go but Up
It doesn’t matter if the books are forced to lose money while they spend heavily on marketing and offer big discounts despite the state having a 51% tax rate. Professors at business school talk of a “first-mover advantage,” which each operator seeking the New York market in online gaming will strive for.
Sam Panayotovich, a gambling analyst from NESN, thinks the offers will be even more valuable because there will be less competition in that market. “FanDuel and the other books who are live really need to acquire customers over the top right now because they’re all losing money on the back end with taxes. They are desperate to get people signed up,” he asserts.
The volume generated by the state, which has a long tradition of sports gambling and has the fourth-largest US population, will help operators make up the difference. Corollary benefits for the state could also be derived from the desire of the companies to establish a foothold in New York City, where they invest in local media companies with advertising dollars.