It has been some journey for the New York sports betting market, with record numbers of bets handled and revenue generated following legalization in January.
Since its launch, there has been incredible interest in wagering on sports for the first six months of the year. So far over $6.9 billion in bets have been handled by the eight current legal mobile sports betting operators, generating $491.3 million in gross gaming revenue, of which $250 million is due in tax to the state.
It hasn’t been the smoothest of rides, with operators arguing for tax breaks, and some small opposition to the legalization in general. However, it cannot be argued that the legalization of online sports betting hasn’t been a huge success for the Empire State.
Seasonal Slowdown Curbs Betting Options
And it seems now there could be another hurdle for sports betting operators to navigate, as a seasonal slowdown begins. The NBA season is coming to a close, with the Golden State Warriors and the Boston Celtics making it to the NBA Finals, which begin on June 3rd, but that’s it until the new season starts.
Then you have the NFL, which doesn’t begin again until September, the NHL, whose conference finals are taking place through early June before their season finishes, and even international sports, such as UK soccer, break for the summer, with a few international games taking place.
It’s no surprise, then, that this seasonal slowdown is being felt by the eight mobile sportsbooks in New York. And with Bally Bet looking to enter the market in Q2, it could be a tough time with little to bet on for customers.
For only the second time this year, since their launch on January 8th, 2022, the betting handle fell below $300m. The first time this happened was during the week that ended May 1st, and it happened again midway through the month in the week ending May 15th.
Bets handled were reported to have dropped to $286.2 million, with operators only holding on to 10.8% of that for $31 million in revenue. This revenue will then be heavily taxed by the state at a rate of 51%.
XFL Launch Could Provide a Boost
There could be a slight upturn next year, though, with the XFL looking to launch as the NFL finishes its season with the Super Bowl. The XFL, for those unaware, is the new minor American Football league that is part-owned by Dwayne “The Rock” Johnson.
It will consist of eight teams that are split into East and West divisions. The seasons will run from February to April. Each team will play a ten-game regular season with the top four progressing to the playoffs to fight for the XFL championship.
Though it will not likely be played into May when the seasonal slowdown begins, it could have an added boost in the build-up to help sportsbooks get by and cope with the fall in revenue as spring moves on into summer.
Until then, it looks like sportsbooks operating online will have a lull in their revenues unless tax changes do come in to help them. That, or they begin accepting bets on eSports markets, which some already do, because this will allow them to offer bettors access to a wider range of events.
If something isn’t done to assist operators, though, it is possible that we could end up seeing one or two potentially leaving the market, especially when they are being taxed so heavily.