Mobile betting is coming to the Big Apple with hopes that favorable odds will be ready for The Super Bowl in 2022. The departing governor, Andrew Cuomo, started the ball rolling towards legislation that would bring the state of New York in line with others where mobile sports betting is already legal. As recently as 8th November 2021, 9 licenses were granted. The following operators will be setting up their servers to allow New Yorkers to access betting from their own homes: – Bally’s, BetMGM, Caesars, DraftKings, FanDuel, PointsBet, Resorts, Rush Street Interactive, and WynnBE. Up until now, they have had to cross the state borders to New Jersey, Pennsylvania, or Connecticut for mobile betting. While it has been legal to have a flutter on the outcome of a sporting event in New York for quite some time, New Yorkers still had to travel up to Resort World in the Catskills to legally place a bet. Mobile betting is different, however, because you don’t need to leave home to do it. People will be able to log on from their mobile phone, tablet, or laptop to place their bets and get an armchair sportsman’s seat.
The servers do need to be in one of New York’s four licensed casinos. The licenses that have been granted are for ten years, which is just as well as the set-up costs the operators are sky-high. There’s a $25 million one-off fee for the Gaming Commission’s license fee and then the sports betting platform will be charged $5 million annually by the casino that hosts their server. In addition to these fixed costs, Sportsbooks will have their tax rate calculated at 51% of their gross gambling revenues. They obviously think that there is money to be made or they wouldn’t be making investments on this scale. New York’s population of almost 20 million people is attractive to the gambling industry due to its wealth, fanatical interest in sport, and its proportion of high earners. New York is one of the most important and largest markets in the USA.
The winners appear to be the punters and the big named operators. However, what will the effect be on the global gambling industry? With New Yorkers able to gamble from home, there could be less of an incentive for them to travel to a more exotic location to play in a bricks-and-mortar casino. New Jersey might see a drop in visitors from its neighboring state with 20% of its current bets being placed by traveling New Yorkers. However, looking at the online gambling statistics it becomes clear that the sports betting market is still very immature. Independent research suggests that while many people are used to playing lotteries, comparatively few people have placed a sporting bet. With the right communication and messaging, there could be exponential growth from a small base. Those companies investing millions of dollars in mobile sports betting in New York wouldn’t be doing it unless they were confident that they were going to get a decent return on their investment. With advertising $ being used to promote sports betting as you watch your team, it is unlikely that this won’t have a knock-on effect around the world.
The biggest losers in all of this are likely to be the offshore casino companies and unlicensed practitioners. US citizens who live in states where mobile gambling is not legalized have been able to place a wager thanks to companies such as Costa-Rican-based Bovada. They have offered both Casino and Sportsbook betting. Because they are based out of the US, they do not need a state license to operate and are not subject to US gambling and betting laws. While Bovada had already pulled out of operating in New York before mobile betting licenses were granted, there were still plenty of other operators taking bets ‘illicitly’ in the state. A recent survey of bettors concluded that 7 million Americans placed a bet with a bookie in 2021. This is a 13% increase from the previous year. In addition, 11 million gamblers will place a physical sportsbook bet – an increase of almost 60%. It is the size of the market that has driven the change in legislation. It is estimated that $1 billion will be taken away from the illicit market in New York once the new licensed platforms are operational. It’s not hard to see why the state would be happy to get its share of that revenue through taxation.
By making mobile sports betting legal it should mean that the predatory practices of the illicit operators can be driven out. Better regulation will mean better protection for the gambler, and they won’t be exposed to the current levels of risk.
If mobile betting can be seen to be profitable, successful, and safe in New York the global gambling market will likely see huge growth. What happens in New York more often than not causes ripples around the world. There is no reason to believe that global mobile betting won’t see a significant boost.