The New York sports betting market is operating ahead of schedule.
When mobile sports betting became legal in New York in January 2022, Governor Andrew Cuomo said that the initiative could bring $500 million in tax revenue by 2025.
Key lawmakers scoffed at the idea that legal sports betting in New York could bring in half a billion dollars in annual tax revenue to the state in just three years. However, just 12 months after launching, New York’s nine sports betting operators have exceeded Cuomo’s projections.
In fact, mobile sports betting in New York raised nearly $700 million in tax revenue in 2022, according to the New York State Gaming Commission.
Here is a summary how the New York sports betting market fared in 2022:
- New York sports betting handle reaches $16 billion in 2022
- Gross gaming revenue tops $1.35 billion for NY sports betting operators
- NY sports betting generates nearly $700 million in tax revenue
- FanDuel (40%), DraftKings (28%), and Caesar’s (17%) dominate NY betting market
- Top 3 sportsbooks account for 85% of NY sports betting handle
Before its launch, the New York sports betting market was often compared to New Jersey, which generated a mobile sports betting handle of $10.93 billion in 2021.
But those numbers paled in comparison to figures posted in New York’s first year of legal sports betting.
According to the New York State Gaming Commission, the New York sports betting handle topped $16 billion in 2022.
Not only did the Big Apple topple projections but it quickly established itself as the biggest player in the US sports betting market.
The state saw the most action in its first month of operation, as the mobile sports wagering handle topped $1.6 billion in January 2022.
As expected, July ($800 million) and August ($872 million) saw the lowest total betting handle of any month during the 2022 calendar year. The drop off coincides with the US sports schedule, which features only one of the four main sports leagues (MLB) in action during the late summer months.
However, New York’s sports betting market started to rebound in September with the start of the NFL season. The NY sports betting handle eclipsed $1.25 billion in September before topping $1.5 billion in October, November, and December.
Not only is the New York sports betting market thriving but operators posted excellent gross gaming revenue figures in 2022.
Overall, mobile sports betting in New York generated $1.35 billion in gross gaming revenue in 2022. The gross gaming revenue represented a cut of about 8.39% of the total sports betting handle in New York.
However, the data shows that sportsbooks managed to increase their portion of the profits throughout the year.
In January 2022, operators earned $124,138,995 in gross gaming revenue from mobile sports wagering, which works out to a vig of 7.4 percent of the total betting handle.
That number dropped to 5.39 percent in February, the lowest of any month in 2022.
By August and September, sportsbooks were earning a profit percentage of 11.4 percent, which helped the state post record revenue numbers in the latter part of the year.
New York generated a record $143 million in gross gaming revenue in September before exceeding that number in consecutive months during October ($145 million) and November ($148 million).
Revenue dropped off slightly due to an influx of promotions in December, falling by 4.35 percent to $141,769,787
Unlike other states, New York’s sports betting model operates under a 51 percent tax rate for operators.
While the hefty tax rate had some detractors, the decision seems to have paid off for the state, as mobile sports betting in New York has generated nearly $700 million in additional tax revenue.
Most of that revenue has been allocated towards education, youth sports, and problem gambling initiatives.
According to the official numbers, NY set a record for sports betting tax revenue has continually set records since the start of the NFL season.
The state earned $63 million in sports betting tax revenue in January 2022, the first month that mobile sports betting was legal in NY.
However, that mark would not be surpassed until the following September, when sportsbooks started to earn profits at a higher rate.
Beginning in September 2022, New York set a record for sports betting tax revenue for three consecutive months. The state earned $73 million in net revenue to education in September, followed by $74 million in October, $75.5 million in November, and $72.6 million in December.
The New York sports betting market is thriving but only a handful of the state’s nine operators have been able to gain a foothold in the Big Apple.
FanDuel accounted for 40 percent of the total sports betting handle in New York in 2022, earning the biggest share of the NY sports betting market.
DraftKings (28 percent) and Caesar’s (17 percent) were next on the list while no other sports betting operator had more than a 8 percent market share (BetMGM).
On top of earning a lion’s share of the NY sports betting market, FanDuel was also the only operator that claimed a higher percentage of the gross gaming revenue than its market share.
For 2022, FanDuel earned a whopping $652 million in gross gaming revenue or 48 percent of the total betting revenue earned in the state.
Only four operators (FanDuel, DraftKings, Caesar’s, and BetRivers) were ready to take bets when the NY sports betting launched on Jan. 8, 2022.
Three of those operators have dominated the New York sports betting market ever since.
In fact, FanDuel, DraftKings, and Caesar’s have combined for a whopping 85.5 percent of the New York sports betting handle since January.
BetMGM is fourth on the list of New York’s most popular sports betting operators after generating a betting handle of $1.3 billion or 8.3 percent of the total sports wagering handle.
The other five sports betting operators combine to make up the remaining 6.2 percent of the market share.