New York HIts $25 Billion Betting Handle in New National Record Time

New York is a center for, industry, entertainment, and travel in America, and now, legal sports betting. 

According to revenue figures provided by the state regulator, New York—which legalized sports betting in the second week of January 2022—has already surpassed a $25 billion betting handle, making it the state that required the shortest time to eclipse the milestone amount.

Not only is New York off to the best start in American sports betting history, but it is already one of just three states to have processed over $25 billion in wagers, alongside Nevada and nearby New Jersey.

It took the Big Apple just 16 months to hit the $25 billion mark, smashing New Jersey’s record of 47 months, roughly three times slower than New York’s searing pace.

The explosion of sports betting, particularly online and mobile sports betting, has significantly benefited the state’s tax fund. As of June 2023, it recouped over $983 million in tax revenue that it put into different programs and efforts throughout the state, including youth sports and problem gambling treatment.

The near one-billion-dollar tax kitty comes in part because of the extreme tax rate (51%) sportsbooks are required to pay on revenue.

There are nine online sportsbooks in operation in New York. Of them, FanDuel and DraftKings have emerged as the market leaders, with DraftKings only last month passing FanDuel in market share (FanDuel had led from the first month until that point). In total, they are responsible for roughly three-quarters of the market’s activity.

FanDuel reported a $6.6 billion handle in 2022, and DraftKings a $4.6 billion handle. The two sports betting giants were responsible for over $800 million in tax payments to the state’s $983.5 million total.

Fanatics will soon enter the New York market after acquiring PointsBet’s North American assets in a deal worth $225 million. Fanatics previously appeared to have a deal in place for $150 million but was outbid by DraftKings, though Fanatics CEO Michael Rubin believes that DraftKings merely wanted to delay Fanatics’ targeted entry at the start of NFL season into its new jurisdictions.

New York’s dominance in the sports betting scene has been a pillar for many other states in their efforts to legalize sports betting locally. It has also shown how a state can benefit from adding legal sports betting to its catalog of approved entertainment items, specifically in relation to the taxable revenue it creates.

That said, the 12 states that have not legalized sports betting often point to factors such as growing problem gambling rates as reasons for their opposition, regardless of if part of the new tax pool is divvied up to combat that.

While nothing has materialized yet, New York sports bettors and those within the industry should keep an eye on what is going on in Ohio. Last week, Gov. Mike DeWine doubled the tax rate on sports betting revenue from 10% to 20%, a move that was not well received by the sportsbooks or a group of lawmakers. 

Ohio’s situation is important because earlier this year, DraftKings CEO Jason Robins told New York regulators that his company would be forced to provide less profitable odds to consumers if the state did not cut the tax rate to preserve their profitability. Those incidents together show a growing motivation for sportsbooks to clash with policymakers and local regulators.

New York will insatiable be in store for a jump in betting handle and revenue when the NFL season kicks off on September 7 in Kansas City, Missouri. The NFL is the most active time of the year for sports bettors and ends a “dry period” where the NFL, NBA, NHL, and other sports are all off of the airwaves.