Last week, New York sportsbooks had a remarkably good week at their clients’ expense.
The nine licensed mobile operators reported gross gaming revenue of $43 million for the week ending Oct. 9, according to the latest gaming commission report, the highest GGR since the third week of legal sports betting, which ended Jan. 23.
The high GGR was mostly the result of a remarkably high statewide hold rate — or loss rate for gamblers — of 13.5%, which is a bit puzzling considering the Buffalo Bills, New York Giants, and New York Jets all easily covered the point spread on Sunday. It was among the highest hold rates in New York since launch, but the second over 13.3% in the last four weeks. The average hold rate for sports gambling nationwide is around 7.2%.
The $319.3 million in handle last week continued a tepid fall recovery after handles dropped significantly over the summer. Handles have eclipsed $300 million for three straight weeks, but haven’t yet returned to the high-flying early days of legal sports betting in New York, when they exceeded $400 million in four out of the first five full weeks.
Handle similar to week before
New York sports bettors placed $1.26 billion in wagers in September, the highest handle since May, but below the $1.5 billion mark the state cleared in its first three months and a bit under projections made by Sports Handle’s Chris Altruda heading into the start of the NFL season.
Last week’s handle was down about 1% from the week ending Oct. 2. The relatively slow fall recovery could be a result of diminishing sign-up bonuses or, as some in the industry have suggested, is a symptom of the 51% tax rate on GGR, which is tied with New Hampshire for highest in the nation. Efforts by New York legislators Joseph Addabbo and J. Gary Pretlow to add operators and consequently reduce the tax rate didn’t make the current fiscal-year budget, but figure to come up again when the legislature reconvenes in January.
Sportsbook operators have complained that the high tax rate has discouraged them from offering promotions that they routinely offer in states with lower tax rates.
Taxes keep rolling in
Overall, it’s hard to argue with the tax benefits of sports betting in New York so far. All told, New Yorkers have bet $11.9 billion on sports since the state launched regulated mobile gambling, making New York the sports betting capital of the U.S. Operators have hauled in $957 million in gross gaming revenue — translating to a hold rate of 8% and $488 million in new tax revenue.
In July, Gov. Kathy Hochul’s office projected $357 million in tax revenue for fiscal year 2023, which began April 1, an estimate that still could prove low. New York sportsbooks have had to fork over $193.6 million in taxes since the week that started March 28, and there are six months left in the fiscal year, including 13 more weeks of NFL regular season games.
Three operators have seized about 80% of New York’s market share, with FanDuel (35%), DraftKings (25%), and Caesars Sportsbook (20%) dominating wagering activity in the state.
