Will We See the Same Revenue for NY Online Betting as with Retail?
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After almost three years of in-person betting at retail sportsbooks, New York sports betting online has gone live ahead of the NFL playoffs.
New Yorkers have option to bet in-person and online, and with the Super Bowl, March Madness and the major league baseball season coming in the next three months, the online space could see incredible numbers in its first quarter.
What Does Going Live with Online Sports Betting Mean for Retail?
In reality, it doesn’t mean anything in terms of its availability. These places will not be closing, but at the same time, it does make them much more invaluable to the operators and therefore, we may not see as much business come through here than we previously did.
With retail betting, there is a lack of promotions and free bets as it is all done in person rather than online. At the same time, the odds rarely change, as it doesn’t give you much of a chance to see odds from other sportsbooks, whereas online betting allows you to compare and pick up free bets regularly.
As proven in online betting states across the country, however, one thing is for certain: more people will bet online than in-person.
Will New York’s Online Space Generate More Than Retail?
Logically, you would assume that with much greater access to more of the population, there would be a significant rise in customers and revenue. However, the 51% tax rate that the state will take from the online sportsbooks’ revenue does leave a lot of math to be done and questions to be asked.
Yes, the state will see people betting online more than in-person and see a rise in overall participation in betting. However, the 51% tax rate will bring the margins down greatly, but in reality, given how anyone 21 years or older can bet anywhere in New York, the overall popularity of online sports betting should still mean it beats that of retail revenue.
To put it in perspective, Arizona opened with seven online sportsbooks in September 2021 and took a reported $291.2 million in wagers in the opening month, which equaled $32.3 million in revenue. To compare, the country’s busiest market, New Jersey, took nine months to surpass that figure when it eventually reported $385.3 million.
New York sports betting had 17 million online transactions in the opening weekend. So, yeah, there will be a lot of money made.
The only issue is the 51% tax rate, which will see profitability take years to come and perhaps never reach the overall figures of states listed above. However, in terms of surpassing retail sportsbooks, that should come with ease over time.
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