New York could become the largest legal sports-betting market in the United States, say analysts, however warnings have been issued regarding the inevitable shortfall should mobile sports betting be run as a monopoly through the State Gaming Commission.
The jurisdiction is capable of generating $20bn a year in wagers, according to projections by PlayNY, should governor Andrew Cuomo follow through with his proposal to make online sports betting legal in the state.
“There is no question that New York would almost immediately become the crown jewel of the legal US sports betting market,” said Dustin Gouker, lead analyst for PlayNY.com.
“The devil is always in the details, but opening a market that could be worth more than $20bn a year in bets could be a game-changing moment for the entire industry.
“On the other hand, a state monopoly, such as what governor Cuomo proposed, would be a mistake that could forever limit the ceiling for New York.”
With an open market such as New Jersey, the region is said to boast the potential to generate more than $1bn of gross gaming revenue annually on more than $20bn on bets.
Though the tax structure is yet to be decided, if taxed identically to retail sportsbooks, that would produce more than $100m annually.
The Empire State has already proven to be a significant revenue generator for New Jersey, with a report from researcher Eilers & Krejcik Gaming in February 2020 estimating that New Yorkers wagered $837m in the Garden State in 2019.
“Mobile sports betting will undoubtedly draw billions in bets in New York, and is easily one of the most prized markets that have yet to legalize it,” noted Eric Ramsey, analyst for PlayNY.com.
“It will be a big market no matter what, but the Cuomo plan has a chance to significantly lower the potential revenue ceiling.”
A state-run sportsbook, says PlayNJ, would allow the state to capture more of the gross gaming revenue, which in turn makes it appealing to state governments.
However, it is warned that a monopoly would do little to aid struggling racetracks and retail casinos in New York, with bettors also left with fewer choices and less enticing promotions, among other issues.
“The intent for New York and other states is to produce revenue for the state, and a state-run monopoly can do that very thing,” Ramsey added.
“But bettors ultimately suffer and tend to engage less than in states that are open markets, artificially reducing the size of the market. It’s a balance that New York will have to grapple with as the state figures out how to structure mobile sports betting.”