Historically, the state of New Jersey has long been regarded as a “little brother” of sorts next to its larger neighbor New York – but that narrative has been upended in the era of legal sports betting.
Based on the latest revenue reports released by the states’ respective gaming regulators, New Jersey has usurped New York by becoming the East Coast’s dominant sports betting market.
And as industry experts predicted when the Empire State finalized its sports betting regulations back in June, declining to offer online / mobile wagering has significantly hindered New York sportsbooks’ performance.
New York Needs Online / Mobile Betting Badly Says Expert
New York voters approved legal sports betting in 2013, anticipating the end of a federal ban on the industry outside of Nevada which was finally repealed by the U.S. Supreme Court five years later.
But under Governor Andrew Cuomo’s interpretation of that referendum, the electorate only authorized in-person wagering via sportsbooks operated within brick and mortar casinos. As he told WAMC-Albany radio station earlier this year, Cuomo doesn’t believe in the financial or ethical merits of online / mobile sportsbooks:
Andrew Cuomo said: “Sports betting, first of all, does not make you that much money.
They raised something like $13 million – $13 million is a rounding error in our state [budget].
I am not a fan . . . [of when] you can bet anytime from your cellphone.”
The state’s first land-based sportsbooks went live in July of this year, but barred from offering online / mobile services, they’ve largely struggled to generate significant revenue.
New York Sportsbook Revenues 2019
According to the latest revenue reports released by the New York State Gaming Commission (NYSGC), the four non-tribal commercial casinos operating sportsbooks combined to win $2.2 million from bettors. That figure represents a 4.4 percent decline from September’s revenue haul of $2.3 million.
All told, New York’s four non-tribal sportsbooks have earned only $5.7 million in revenue since launching in July. Based on a sports betting revenue tax rate of 10 percent, New York has added just $570,000 to state coffers since the start of legal betting.
The NYSGC doesn’t require operators to disclose their handle figures – or the amount of money wagered before winning tickets are paid out – while the several tribal casinos offering sports betting aren’t required to report handle or revenue.
New York Sportsbooks at a Disadvantage
Nonetheless, as Chris Grove – the managing director of industry analysis firm Eilers & Krejcik Gaming – told NewYorkUpstate.com in a recent interview, the lack of online / mobile options has put local sportsbooks behind the proverbial eight ball:
“We estimate that New York will only realize about 5% of its true sports betting potential if things stay as they are now.
The reality is that consumers want convenient ways to bet, and the status quo for sports betting in New York is anything but.
If the state is serious about siphoning off demand from the illegal market and generating real tax revenue, it needs to add online sports betting to the mix.”
New Jersey Benefits Immensely from New Yorkers Using the State’s Sports Betting Apps
Meanwhile, sportsbooks in the Garden State which have been offering online / mobile betting since August of 2018 have marketed themselves to New Yorkers as a viable alternative.
For residents of New York City, the closest upstate casino is Resorts World Catskills in Monticello, which requires a two-hour drive to reach. On the other hand, bettors living in the Big Apple can simply cross the Hudson River to access New Jersey’s online / mobile sports betting market in a matter of minutes.
This proximity to online / mobile options has lured New Yorkers to New Jersey in droves. Per a report from Esquire magazine, 44 percent of all online / mobile bets placed in New Jersey were geotagged to within two miles of the state’s border.
New Jersey Sportsbook Revenues Boosted by New Yorkers’ Bets
And during a public hearing, a FanDuel executive told New York lawmakers that nearly 25 percent of the company’s business can be attributed to New Yorkers making the short roundtrip.
Predictably, the sports betting market in New Jersey dwarfs that of its regional rival. Per the latest reports from the New Jersey Division of Gaming Enforcement (NJDGE), the state’s sportsbooks combined to generate $487.9 million in handle and $46.4 million in win revenue during the month of October.
Of those totals, online / mobile apps were responsible for more than 80 percent of the monthly handle and revenue – a ratio which has remained consistent since New Jersey’s sports betting industry went live.