Following a launch that saw smashed records at every turn, with handle, revenue and spending all coming in at levels the North American market had not seen before, sports betting has finally slowed in New York State.
April, with its handle of $1.4bn, saw a 15.2% decrease when compared to the $1.6bn worth of bets recorded in March.
According to the New York State Gaming Commission, this marks the lowest handle the Empire State has experienced to date, coming in lower than the $1.5bn earned in February.
Revenue also fell during the fourth month of the year, a fact that is only compounded when one considers the staggeringly high 51% tax rate present in the state. Indeed, gross revenue came in approximately $104.1m for sportsbooks, down 8.9% when compared to March’s numbers.
Of this gross revenue, 51% is collected by the state, meaning operators, despite the impressive $1.4bn handle, only saw a maximum of $50m in net revenue.
Online sportsbooks in New York averaged $46.4m in wagers per day during the month, reflecting a noticeable decrease when compared with March’s $52.8m.
Much of this drop off can be attributed to a relatively sparse sporting calendar during the month. Indeed, despite the NBA Playoffs taking place, a lack of NFL matches meant the appetite for sports betting was significantly smaller than in recent months.
In terms of operators, FanDuel has cemented its place as the leading sportsbook in New York, with 43% online market share and $599.5m in bets. DraftKings followed behind with 24%. In third came Caesars Entertainment, which, despite a staggering marketing spend, has failed to cement itself as the Empire State’s favorite sportsbook.
Overall, April saw the state of New York earn $53.1m in tax revenue. The tax rate here ultimately produces a serious problem for operators in New York. How long can they continue to spend on customer acquisition when revenue is so paltry?
This, of course, is a question only the operators can answer, but unless this high tax rate changes, we may begin to see sportsbooks pull out of the United States’ most exciting market.
