- Four companies are set to launch mobile sports wagering in New York state today at 9 a.m. ET.
- FanDuel, DraftKings, Caesars Sportsbook and Rush Street Interactive are the first companies to receive approval from the state to operate mobile sportsbooks.
- “The event marks the biggest day in the history of sports betting,” said Patrick Keane, CEO of Action Network.
Legitimate Mobile Sports Betting is now live in New York.
FanDuel, DraftKings, Caesars Sportsbook and Rush Street Interactive, the first companies to offer mobile betting on sports games by the New York State Gaming Commission, can launch their sportsbooks today at 9 a.m. ET.
New York is Fourth most populous state in America, And now is the largest state to legalize sports betting. However, there will not be an immediate injection of cash into the coffers of gambling companies. New York’s 51% tax on gambling revenue is heavy – bigger than New Jersey’s 13% rate. Research firm Eilers & Crazy Gaming forecast that New York will not replace New Jersey as the national leader in gross gaming revenue — the amount of players they win — until 2024.
Still, that doesn’t change the ribbon-cutting long-term importance of today’s metaphor, said Patrick Keane, chief executive of The Action Network, a media platform aimed at sports bookmakers.
“This is arguably the biggest day in the history of sports betting,” Keane said. “And it’s magically located with the first and final 17-game season in NFL history.”
The final slate for the National Football League’s regular-season games is tomorrow. The launch will give New York sports fans an instant opportunity to download the app and bet on the most popular American sport, the NFL, to bet on. It also presents a valuable marketing opportunity for the first four companies to accumulate New York customers. With promotional offers at your first bet.
Five other gambling companies – Bali Bet, BetMGM, Winebet, Pointsbet and Empire Resorts – have 10-year online sports betting licenses in New York, but have not yet passed the statutory and regulatory requirements to go live.
By December, more than two dozen states Already legalized sports betting, although many only allow in-person gambling. FanDuel and DraftKings have established themselves as early market leaders in mobile sports betting, but the national revenue numbers remain relatively low.
According to Eilers & Krajic, US gambling companies made about $3.25 billion in total revenue from sports betting in 2021. Of this, about 20% came from New Jersey – the most of any state. new Jersey Mobile sports betting legal in 2018.
Investors are counting on the betting boom as states join california And Texas Prepare to vote on mobile legalization. According to Eylers & Krajic, annual US gambling revenue could grow to about $17 billion by 2026.
“Every state is looking at legalizing a sportsbook like DraftKings,” Matt Kalish, North America president and DraftKings co-founder, said Friday on Businesshala’s “Squawk Box.” “It’s a very popular issue. In some recent referendums, such as in Maryland or Louisiana, more than 70% of the vote supported legal sports betting. It’s important to increase tax revenue, create jobs in the state, and fund important projects.” It’s a good way.”
But higher future taxes, such as New York’s 51% rate, and balloon marketing budgets have eroded some investors’ appeal to the industry. Shares of DraftKings and Pointsbet have fallen more than 60% in the past 52 weeks.
With many companies offering similar mobile sports betting products, companies have to spend hundreds of millions of dollars to attract customers. A media executive told Businesshala that he predicts a major sports gambling company will either go bankrupt or sell “for peanuts” this year, given the amount of competition and high costs to acquire customers.
“This business model is flawed,” Jim Chanos, founder of hedge fund Kynikos Associates, said of DraftKings on Businesshala last month. “Marketing spending in America is insane.”
Chanos said he has had a short position at DraftKings for most of 2021. DraftKings CEO Jason Robbins responded to Chanos in his own Businesshala interview, saying it takes two to three years to reach profitability in the state given the cost of marketing. He said it has already happened in New Jersey.
Meanwhile, UK gambling company Flutter is considering pulling out FanDuel and taking it public in the US, but an ongoing legal dispute over ownership with Fox Sports has delayed progress.
WATCH: DraftKings CEO Jason Robbins reacts to Jim Chanos’ short position
Disclosure: Businesshala parent Comcast and NBC Sports are investors in FanDuel.