Record-setting year for state’s online sports gambling, tax revenue

Launch of sports betting in NY yields $16 billion in wagers, $900 million in tax benefits

When online sports betting launched in New York, experts in the gambling industry envisioned that the state would become the country’s leader in legal betting.

Not only did that happen, but it even exceeded many of those expectations.

More than $16 billion was wagered on sports in New York in the first year of legal operation in the state, the NYS Gaming Commission reported. That is nearly double the money that any other state generated in 2022.

According to GeoComply, a software firm used by sports books to ensure geolocation requirements, more than 3.8 million unique player accounts have been created since the January 2022 launch, resulting in more than 1.2 billion transactions.

"New York set all-time records for handle and revenue in its first year of existence,” said Grant Lucas, an analyst at PlayNY, a resource for information about legal New York gambling and sports betting. “Even the most optimistic forecast couldn't predict that kind of output within the first four years of online sports betting in New York, let alone the first 12 months."

For New York, that has also meant $909 million in tax revenue generated for education, youth sports programming and problem gambling prevention treatment and recovery services. 

Gov. Kathy Hochul said last month that the state has collected more than $709 million in taxes on bets in 2022, a figure that also leads the nation. An additional $200 million in licensing fees has also been collected. Most of this money will be used for education funding.   

"I look forward to another year of delivering top-tier mobile sports wagering experiences that generate revenue to enrich the lives of New Yorkers across the state,” Hochul said in a statement.

The one-year anniversary of mobile sports wagering in New York was Jan. 8, and up until then, the total mobile sports wagering handle reached $16.6 billion.

Revenues from mobile sports wagering are distributed as follows: $5 million to fund sports programs for underserved youths, $6 million to fund problem gambling education and treatment and the remaining majority of money will fund education aid.        

“You can't overlook what sports betting has done for the state,” Lucas said. “No other state with legal sports betting has generated as much tax revenue as New York.”

According to Search Intelligence Ltd, New Jersey was second in total handle for 2022, with more than $8.7 billion wagered. Since 2018, $31.5 billion has been wagered in New Jersey, one of the first states to jump on legal sports gambling.

That year, the Supreme Court removed the federal ban on sports betting, allowing states to legalize it if they choose. Since then, many states have legalized sports betting, leading to the industry’s significant growth. Americans went from wagering $44 billion in 2021 to $74 billion in 2022 – an increase of 70%, Search Intelligence Ltd notes.

In New York, nine professional operators entered into the state’s mobile sports betting industry in its first year.

State officials say they’ll continue to prioritize conducting sports gambling in a safe manner and help those with addiction issues.

State Gaming Commission Chairman Brian O'Dwyer said state leadership will try to ensure that betting is “conducted in a responsible manner” and with the help of the Office of Addiction Services and Supports, educate the public about responsible gambling and provide resources for those who need them.

Super Bowl bound to be another big day for state gambling

PlayNY is estimating that the state will yield the second most handle in the U.S. –  behind only Nevada – for the game, which pits the Kansas City Chiefs against the Philadelphia Eagles. Nationally, the game is expected to generate $1.1 billion in bets. Nevada could take in around $176 million of that, according to PlayNY projections.

It estimated that betting in New York totaled between $140 million and $160 million on Super Bowl Sunday last year when legal mobile sports betting had just begun in the state. New York did not release officials numbers for the 2022 Super Bowl.

But don't be surprised if New York passes Nevada in sports betting for Sunday's game, said Eric Ramsey, lead market analyst for PlayNY.

Despite the rise of legalized gambling in many states, only 20% of respondents to the recently conducted American Sports Fanship Survey say they plan to wager on the game, although 52% of those who describe themselves as “avid” fans say they will, according to the research of St. Bonaventure University Jandoli School of Communication and Sienna College Research Institute. Of those who intend to wager, 47% say they will wager more than $100.

Welcome to Buffalo Next. This newsletter from The Buffalo News will bring you the latest coverage on the changing Buffalo Niagara economy – from real estate to health care to startups. Read more at BuffaloNext.com.

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The Buffalo Next team gives you the big picture on the region’s economic revitalization. Email tips to [email protected] or reach Buffalo Next  Editor David Robinson at 716-849-4435.