New York online sports betting handle tops $3.5B; March Madness bets could hit $400M

Mobile sports betting handle in New York has topped $3.5 billion, according to latest data, confirming the momentum currently experienced by the market, which debuted about two months ago. After payout to winners, operators saw nearly $238 million in gross gaming revenue, of which the state keeps a 51% share.

“The initial surge of promotional spending has died down a bit and a post-football slowdown is expected. But New York remains on a remarkable pace,” said Mike Mazzeo, an analyst for PlayNY.com. And while wagering at the Empire State slowed slightly in February, it could be up again this month, with the NCAA tournament around the corner, set to boost sports gaming.

Despite the lower February betting volume -a total of $1.5 billion in wagers, about 12% from a record-setting $1.7 billion in January-, the state still delivered the second-most for a month in US history. Online books averaged $54.6 million in bets per day over the 28 days of the month: they have generated more in sports bets so far than all but eight states did in 2021.

The $359 million delivered last week -the New York State Gaming Commission posts weekly updates- finally brings the total handle above the $3.5 billion mark. FanDuel has positioned itself as the early leader, with $1 billion in handle through February 27, followed by Caesars ($943.9 million), DraftKings ($757.6 million), and BetMGM ($232.5 million).

But what lies in store might bring betting volumes to even higher records. According to a report by news and information site about gambling NYOnlineGambling.com, New Yorkers are expected to wager nearly $400 million in total handle on this year’s NCAA Tournament.

The research factored in the significant betting numbers from the state leading up to and on Super Bowl Sunday, basketball-specific wagering across multiple states from 2019-2021, the first full day of the tournament kicking off on St. Patrick’s Day, and more.

With New York’s high 51% tax rate on mobile revenue, the state would receive between $13.4 million and $14.3 million, the site further reports. NY Online Gambling’s projection is that New York mobile handle will be about $380 million, with a belief the ceiling “could be considerably higher,” including a final total exceeding $400 million as certainly possible.

As New York sports betting keeps up its record-setting pace, the market could, however, see key changes going forward. A tax cut proposal has recently been introduced, which would lower the 51% rate while greatly expanding the total number of operators.

The bill, introduced by New York Assemblyman J. Gary Pretlow, seeks to cut online sports betting tax by half and add at least 7 more mobile sportsbooks to the market, which currently has 9 licensed operators. 

The legislation calls for the state’s Gaming Commission to have 14 operators approved by no later than January 31, 2023; and 16 operators by January 31, 2024. It also provides tax rates to be determined based on the number of operators, modifying the rate from the current 51%, one of the nation’s highest.

Under the current scheme of 9 licensees, a 51% tax rate is imposed. But under 10-12 operators, it drops to 50% and, with 13-14 operators, it notably decreases to 35%. The tax rate reaches a low of 25% if 15 or more operators launch in the state, basically about half the current 51% rate.