$603M in bets during first nine days of online sports wagering in N.Y.

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SCHENECTADY — New Yorkers placed $603 million in online bets in the first nine days of mobile sports wagering in New York, $171 million of it in just the first 39 hours.

The practice became legal in this state at 9 a.m. Saturday, Jan. 8. Data posted Friday by the New York State Gaming Commission indicated that the four companies operating mobile platforms in New York state at the time realized a total of $48.2 million in gross revenue on the $603 million wagered through Jan. 16, the end of the first full accounting week.

The state will claim a little more than half of that through a 51% tax.

One of the four companies, Rush Street Interactive, has a local connection: It runs the in-person sports betting operation at Rivers Casino Schenectady, and is an affiliate of Rush Street Gaming, the Chicago firm that owns Rivers Schenectady.

Rush Street International came in a distant fourth-place among the four mobile operators: $10.6 million worth of wagers placed in the first nine days and $446,696 in gross revenue.

This compares with $257.7 million in wagers and $22.7 million in gross revenue for Caesars, $200.4 million/$14.1 million for FanDuel and $134.4/$10.9 million for DraftKings.

The numbers don’t indicate actual money wagered or profit reaped — the large sums of free credits being offered by the operators are counted as wagers even though they’re not the bettors’ money. Free bets lost by bettors count as gross revenue for the betting platform, even though it’s their own money they’re getting back.

The financial data published for the first time Friday by the Gaming Commission does not track promotional credits awarded by the mobile wagering operators, so there’s not a public window on how much the money the platform operators are spending to prime their new market. Data on promotional credits is reported in neighboring Pennsylvania, a longer-established mobile wagering market, and in New York for commercial casinos.

Rush Street Interactive provided a comment from CEO Richard Schwartz on Friday:

“As the New York mobile sportsbook market matures over time, we are confident that the BetRivers user experience and award-winning customer service will earn player loyalty as it has done in other markets.”

Mike Mazzeo, lead writer at PlayNY, told The Daily Gazette on Friday that he could only speculate on the huge financial gap between Rush Street and the three other companies. But he noted that the other three appear to have invested a lot in free plays and advertising.

“They don’t have that celebrity pitchman,” Mazzeo said of Rush Street International.

“I live in the city — FanDuel is always in your face.”

Caesar’s offered huge deals to those using its platform and raked in a quarter-billion dollars in bets in the opening days. But they bungled their rollout promotions with unclear terms and language, Mazzeo said, leaving bettors frustrated and state officials wagging their fingers.

“[State Sen. Joseph Addabbo Jr.] said it best — they need to get their act together,” Mazzeo said. The operators as a group need to use clearer language about their promos, he added.

The huge sums of money suddenly flying through virtual sportsbooks in New York and the 650,000 unique user accounts created in the first weekend are a cause of great concern for organizations that assist problem gamblers.

Brandy Richards, team leader at the Northeast Problem Gambling Resource Center in Albany, said the omnipresent promotions on multiple media channels are attracting first-time users to a platform that’s easy to use anywhere, any time, with no actual cash in their hands.

“We are already seeing an uptick in calls to our Resource Center and our demographic is shifting to a much younger group of individuals,” she said Friday via email. “We are also witnessing the impact this is having on those who have previously had problems associated with gambling. The barrage of advertising and promotional offers make it challenging for those to maintain their recovery from gambling addiction.”

New York state approved mobile sports wagering as a way of creating a new tax revenue stream for itself. Unlike casino tax revenue, none of the mobile revenue will be shared with municipalities.

The state had forecast $49 million in mobile tax revenue from Jan. 8 to the end of the current fiscal year on March 31.Based on the 51% tax rate, it secured $24.6 million in mobile tax revenue just from Jan. 8-16.

A fifth operator, BetMGM, commenced operations Jan. 17 and four others are awaiting approval.

Mazzeo, who reports on all types of wagering and gaming for PlayNY, part of a network of news sites that covers the legal gambling industry in every state, said time will tell if Caesars can retain its lead in such a crowded market, or if the market can sustain the fevered pace of its first days, which came amid the NFL postseason.

Bettors will migrate to the platforms with the best lines and promotions, he predicted.

Categories: Business, News

1 Comments
DAVID GIACALONE January 22, 2022
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Have any of our Casino cheer-leaders projected how much the City and County will be losing in tax revenue because dollars are instead being spent on online sports betting from which we get no revenue? Or, how many fewer bodies will be coming to Mohawk Harbor?

Here’s a good bet: Rivers Casino will be again asking for a cut in its gaming tax rate to make up for bodies no longer coming in person to the Casino. And, McCarthy and Gillen will push to get more millions spent trying to attract the public to Mohawk Harbor.