Last Saturday it happened! Something I never thought would happen, at least with Andrew Cuomo as Governor. At 9 am on Saturday, January 8th, mobile sports betting went live In New York State, just in time for the NFL (National Football League) playoffs!
New York State is the 4th most populous state in the Union, and it is now the largest state to legalize mobile sports betting. Investors are counting on a “wagering surge” as states such as California and Texas prepare to vote on mobile sports gambling legalization. As of December 2021, more than two dozen states have already legalized sports wagering. Several states currently only allow in-person gambling.
U.S. gambling companies generated approximately $3.25 Billion in total revenue from sports betting in 2021, according to research firm Eilers & Krejcik. Approximately 20% of that figure came from New Jersey alone. New Jersey legalized mobile sports betting in 2018. As I wrote back in September, it is not a coincidence that earlier this year New Jersey announced a “balanced budget” and made “FULL Pension Benefits” for the first time in 25 years!
A major difference between New York and New Jersey is the taxation rate. New Jersey has a 13% tax on gambling revenue compared to New York State’s exorbitant 51% tax. Eilers & Krejcik estimated that New York will not overtake New Jersey as the national leader in gross gaming revenue until 2024. Gross gaming revenue is defined as the amount of money players wager minus the amount they win. Annual gambling revenue is estimated to grow to roughly $17 Billion per year by 2026.
Are you sick and tired of seeing gambling commercials that seem to be every third ad? Caesars, in particular with J.B. Smoove (Caesar) and Halle Berry (Cleopatra) seem to be on TV and radio twice per hour. Get used to it as sports gambling companies jockey for positions to obtain new gambling customers located in New York State. Gambling advertising budgets are so big, it is estimated that it will take 2-3 years for gambling companies to make a profit. The reason for this is the taxation rate and their substantial advertising budgets.
Currently, there are 4 approved mobile sports gambling platforms:
These 4 approved gambling companies have a major leg up on the 5 companies pending conditional approval, and they are spending millions upfront to acquire new players located in New York State. These 5 pending companies are holding 10-year online sports betting licenses in New York, but have not yet passed the extensive statutory and regulatory requirements to go live.
The 5 pending gambling companies pending are:
In order to understand more about this critical time for online sports gambling, I interviewed our Assemblywoman Stacey Pheffer Amato. She co-sponsored the bill initiated by our State Senator Joseph P. Addabbo Jr. I asked her about what prompted her to co-sign the bill. Some of her points included:
It remains to be seen how this New York State legalized mobile sports betting rollout is received. What do YOU think about the new mobile sports betting program? Feel free to email me at [email protected].