In spite of being the world’s betting capital, sports betting still lags from time to time. As expected, the average betting volume during the summer declines as the start of baseball season doesn’t attract many bettors across the industry.
The Sports Betting Handle Declines in May
In the Empire State, eight mobile sportsbook operators accept wagers, and business has gone down for the week ending on May 15. The bookmakers combined to bring in a total of $286.2 million for the week.
Despite the launch of the mobile sports betting market on January 8, the handle has never been below $300 million. This is the first time since the operation began that the handle has struggled to hit $300 million.
However, the bookmakers combined to have a good hold percentage rate of 10.8 percent, which translated to $31 million in revenue. The tax rate based on revenue is still slated at 51 percent, which is the highest in the country and doesn’t allow promotion deductions.
Sportsbook operators have paid $34.8 million in taxes for the first 15 days of the month. Regardless of an underperforming week, operators have paid a large amount of taxes in that span.
Sports Betting Has Become Second Nature in New York
Sports betting has become very popular in the state as sportsbook brands are easy to recognize. FanDuel becomes the official sports betting partner of the New York Yankees, while Caesars is the official sports betting partner of the cross-town rival New York Mets.
New York is on course to become the jurisdiction that pays the most taxes in the industry. The Empire State will surpass neighboring state Pennsylvania in a matter of a short span. New York will also pay the most taxes in a much shorter span.
Up to this point, operators combined to pay $251.5 million in taxes with two more weeks to report for the month. On the other hand, Pennsylvania does allow its operators to use promotion deductions. Operators in the Keystone State have combined to pay $253 million in taxes since its launch began 3.5 years ago.
What is the Plan For New York Sports Betting Going Forward
Without a doubt, FanDuel has become the most popular sportsbook provider across the state. FanDuel has paid the most taxes, and the difference between the next competitor may widen as the months go on.
FanDuel’s market share may rise when May’s monthly handle report becomes official at the end of the month. Through April, the sportsbook has a market share of 37.9 percent.
The main concern for some of these operators is whether sportsbooks can sustain this strong tax rate. Operators pay an average of $13.2 million in taxes per week due to a hefty tax rate. There were preliminary discussions of a potentially lower tax rate but had no traction.
BetMGM is a sportsbook that decided to scale back its business in the state as it is expensive and difficult to acquire new clients. Caesars has also struggled to find success in the state as it has lost a lot of market share since the record-breaking launch.
Bally Bet has yet to accept any wagers as it is awaiting its approval. This might be a smart approach as the betting volume hasn’t picked back up yet.