The US betting industry is still reeling from the success of the newly launched New York market, as it’s revenue has soared since the state opened its online space last month.
According to the latest figures from the New York State Gambling Commission (NYSGC), online sportsbooks in the Empire State accepted more than $1 billion in wagers in the two weeks since the first operators commenced business.
However, there are still some constraints. Notably, the market is highly competitive, with six major firms – Caesars Sportsbook, DraftKings, FanDuel, Rush Street Interactive (RSI), PointsBet and BetMGM– already operational in the state, and with four more preparing for entry.
Speaking on the latest episode of the Big Betting Balagan podcast, John Pappas, a Public Affairs & Government Relations expert, highlighted both the market’s competitive nature as well as the widely publicized tax rate of 51%, as legislators seek to maximise the highest revenue returns from the sector.
He observed: “A 51% tax rate with this competition and this much spend in the market doesn’t seem like a formula to make a lot of money, but the exposure and need to be in New York is incredible, and I think those companies that are smart about this will find a way to make money, and ultimately what will happen is the state is going to be reaping the most reward here.
“The operators are really just going to be pawns in the way of the state getting the most revenue they can, and hopefully that’s something that will last beyond five, six, ten years before the legislature has to come back and say ‘maybe we need to rethink this policy’.”
Moving away from sports betting, the BBB hosts quizzed Pappas on the state of igaming products such as casino and poker – in particular, why the rollout of such products has been much slower in comparison to sportsbooks.
“You don’t have to look much further at the success in the US in New Jersey, Michigan and Pennsylvania over the past 18 months. They’ve been enormously successful in terms of creating revenues not just for the operators but the states as well.
“There are good US examples of how Igaming can be run successfully here. The real challenge comes to how the US has as new as we are to digital gaming, land-based gaming and traditional gaming – whether it’s lottery, casinos or horse racing – which have been in the US for a very long time and have entrenched interests.”
However, he asserted that the ‘tune has changed’ on igaming from the perspective of major casino operators in the US, with many now recognising the commercial benefits of the vertical, whilst previously many had been fundamentally opposed.