New York Suffers Major Decline in Sports Betting Revenue

New York closed another week in the red in terms of mobile sports betting activity on the weekly. Just recently, the New York State Gaming Commission disclosed that for the week ending on May 21, 2023, the state saw a 3.5% drop-off in placed wagers in comparison to the previous week. However, revenue dropped by a staggering 48% from last week.

In just over 14 months after the introduction of its online sports wagering market, the Empire State transformed into the top U.S. jurisdiction for regulated mobile betting on sports. Despite its limited operator model, in its first year, the state collected over US$700 million in tax revenue from bets which will not be put into education, youth sports, and tackling problem gambling.

Revenue Crumbles Down

For the seven-day period ending on May 21, 2023, the state’s gaming regulator reported that the nine sportsbooks generated US$307.3 million in handle. This was down only 3.5% from the previous week. This was the third week in a row, that the state has posted a decline in sports betting activity, and it can be explained by the looming end of many major sports leagues.

However, the major disparity in numbers came in revenue, as the state clocked approximately US$18.9 million in gross proceeds, or 48% lower than the previous week. The 48% drop-off in gross gaming revenue is the largest since the start of April when the widely popular bettors March Madness conclude. The May 21 results ended a streak of consecutive weeks of revenue about the US$35-million mark.

FanDuel was the operator that suffered the strongest hit in terms of gross proceeds, as the locally-based brand saw its win rate drop from 16% from the prior week to a mere 5.9% in the week ending on May 21. Its revenue dropped to US$7.4 million with a handle of US$123.9. Similar to the Empire State, this was the worst week for online sports betting for the operators since early April 2023.

Meanwhile, the second most popular app in the state, DraftKings, reported wagering activity of US$108.3 million and revenue of US$7.1 million for a 6.5% hold. Meanwhile, the week of May 21 was good for Rush Street Interactive BetRivers, as the sportsbook was the only one in the state with a hold above 7%. It got US$693,189 in revenue and a win rate of 8.5%.

State Wants to Regulate Ads

It is safe to say the Empire State’s mobile sports betting market has been a success. However, its popularity raised some concerns among lawmakers and experts about player health. For instance, Democrats Luis R. Sepúlveda and Leroy Comrie proposed adding warnings on all betting ads in the state, as well as the number of the New York problem gambling hotline number 1-877-8-HOPENY.

Additionally, the NYSGC has also agreed that sports betting commercials are out of hand and has proposed to limit them. In March, it unanimously approved a set of new regulations on sports wagering advertising, marketing, and promotion. One of the new changes is to stop marketing on university campuses, as there was an increase in problem gambling cases among 18- to 24-year-olds in the state.

Source: Senkiw, Brad “New York’s Online Sports Betting Revenue Suffers 48% Drop Week-Over-Week” Covers, May 25, 2023