When sports betting was legalized in New York at the start of the year, it couldn’t have gotten off to a better start. Within weeks it was raking in over $1.5 billion in bets handled, and that figure was steadily increasing over the months that followed.
It led to record figures in bets handled and tax generated for the state, although with an industry high tax rate of 51%, operators haven’t been as happy with the success. Gary Deutsch, Chief Financial Officer of BetMGM has said numerous times that tax rates need to be cut as:
Players would never continue to play if the house always won, and the house cannot continue to play if it’s always going to lose.Gary Deutsch, Chief Financial Officer of BetMGM
All parties will be feeling the pinch now, though, as once again New York sports betting reaches an all-time weekly low for bets handled following the seasonal slowdown that was expected in the summer. Unfortunately, it may have hit even harder than expected.
All parties will be feeling the pinch now, though, as once again New York reaches an all-time weekly low for bets handled following the seasonal slowdown that was expected in the summer. Unfortunately, it may have hit even harder than expected.
Another All-Time Low
The previous lowest bet handle in the Empire State was $248.2 million two weeks earlier in June, showing a drop of nearly $30 million dollars, when comparing the two. However, it was thought there had been a slight upturn in fortunes since then as the following week ending June 19th saw the bet handle increase by over $8 million to $256.6 million: that transpired to be false hope.
Why Aren’t Bettors Placing Wagers?
The reason for the slump in bets handled is because many of the US’ top sports such as the MLS, NBA, and the NFL have all concluded their seasons, and their new campaigns don’t begin until later in the year. This means that the industry is heavily relying on MLB to carry it through this period, combined with other one-off events.
Despite being popular with bettors, events like UFC bouts do not occur as often as regular sports, or at least not with prolific fighters that draw interest. Obviously, a number of high-profile international sports tournaments continue to take place, with the likes of Wimbledon in the UK keeping sports fans on their toes. However, this isn’t enough and the industry is still feeling the squeeze in NY, according to the figures.
As a means to boost bet handles, it could be that the state will soon make it easier to allow bettors to place wagers on eSports events. Indeed, there are many competitions within this market, one of which being the Rocket League Championship Series Spring Major, which happened to take place in London last weekend. Not only this but other events such as the eSports’ World Championships are set to head to Dallas, Texas in the US and could be a source of major interest to bettors.
Creating this new market would hopefully make up for a period in which traditional sports in America are not taking part. It would make sense for bookmakers to turn to alternative markets as this development could see an influx of new customers who have no interest in traditional sports but would like to bet on a new eSports market.
Could We See Figures Drop Below $200 Million?
It is a possibility that we could see figures drop below $200 million as many major tournaments are coming to a close, leaving MLB possibly the only available market to bet on. Many operators have tried to encourage more betting by introducing promotions such as parlay insurance, which refunds stakes if one line of a bet loses. However, that may not be enough to stop the bets handled dropping further.
The only good news for operators is that in the same week that bets handled fell, they actually made more money with less wagering due to having fewer winners. The week previous they managed a gross gaming revenue across the industry of $13.9 million, but that rose in this “worst week” to $15.8 million.