New York sports betting remains strong at $1.5B handle, but revenue slips to $108M

The New York Gaming Commission announced Tuesday that sportsbooks posted $108.2 million in sports betting revenue in February. While handle stayed high at almost $1.5 billion in wagers, a strong performance by the public created a notable month-over-month decline in operators' winnings. 

February marked the sixth consecutive month revenue reached nine figures in New York. However, it was also the lowest amount since operators claimed $99.2 million last August. The public fared particularly well in Super Bowl LVII betting, limiting the house to $1.4 million kept from $100.5 million worth of bets placed during the big game. 

The house claimed at least $140 million in total revenue in each of the previous five months, with January’s $149.4 million as the highest point. In comparison to that month, February’s figure was 27.6% lower, although it was 32% better than February 2022, when operators claimed $82.4 million. 

Handle, while still the highest in the nation for the month at almost $1.5 billion, was also down, dropping 18.1% from January’s record of $1.8 billion, with a hold of nearly 7.4%.

The state collected $55.3 million in tax receipts for February, increasing the overall total for the year to $131.5 million. Revenue through the first two months of the year is $258.4 million, 25.4% higher than the same period last year. 

FanDuel led the state, maintaining at least 40% market share for handle for the fourth straight month by accepting $591 million in wagers in February. However, it was the first time in eight months the company failed to post a double-digit win rate, reporting a 9.1% hold. DraftKings placed second for both handle and revenue, with $491.3 million and $33.5 million, respectively. 

The podium was closed up with Caesars Sportsbook, which saw $192.8 million in handle, and $8.5 million in revenue, but its 4.4% win rate was the lowest of any operator that had an eight-figure handle. 

PlayNY analyst Grant Lucas said the latest returns were helped by “two of the biggest months in New York sports betting, with the $1.5 billion in February giving the Empire State nearly $3.3 billion through two months, no doubt boosted by the NFL playoffs and the Super Bowl.”

Lucas said the sports calendar will peak with the March Madness competition this month, but will eventually wind down and give way to slower betting months over the summer. “We anticipate the state falling short of the overall totals posted in 2022, but there is little doubt that New York will remain the No. 1 legal sports betting market in the nation," he pointed out.

New York has had in-person sports betting at casinos since 2019, and launched mobile betting in January 2022. There are currently nine mobile sportsbooks licensed by the state to take wagers on professional games through websites and apps.

To date, online sports betting in New York has generated over $19 billion in accepted wagers, leading to $1.6 billion in sports betting revenue. The state’s sports betting tax rate is currently set at 51%, which has generated nearly $825 million in taxes over the past two years. Governor Kathy Hochul projects the Empire State will bring in nearly $900 million in tax revenue from mobile sports betting in the next fiscal year, which begins April 1. 

DraftKings' Jason Robins.

A month ago, the heads of two of the largest mobile sports betting operators in New York and the US at large, DraftKings and FanDuel, testified at a joint legislative hearing and urged lawmakers to lower the 51% tax on gross gaming revenue. 

Both Christian Genetski, President of FanDuel; and Jason Robins, CEO of DraftKings, said they believe New York will not continue to rake in that much revenue due to the high tax rate, citing estimates that point to a handle decrease of 10-20% annually unless the tax is changed.