In New York, the sports betting handle is trending only in one direction, and VSO News has assessed the reasons for the downtrend. [Image: Shutterstock.com]
Bad few months
Before New York first legalized the mobile sports betting market in January of this year, sports betting books had very high hopes. Towards the end of 2021, Campy’s Vice President of Sales, Sarah Robertson, said: VegasSlotsOnline News It would have become a ‘huge market’, and given that it is the most populous country offering online betting to date, you can understand why.
It’s fair to say that the market met those hopes in its opening months. New York sportsbook grossed a staggering $603 million in just the first nine days, and built on that performance to overtake New Jersey by the end of January. They hit $1.69 billion in bets in their first month, and turned over $1 billion in every subsequent month.
The first month that New York failed to reach a billion dollars
But in July, that pattern stopped. It was the first month New York failed to hit $1 billion in the handle since its launch, with sportsbooks reporting only half of the handle in January or March of this year. In terms of sportsbooks, it also marks the fourth consecutive month of downsizing for the state.
As this downward trend continues, New York sportsbooks that have already dumped hundreds of millions in marketing may start to worry. But is this concern justified?
Bring in September
In the good news for these teens, the main problem they face is not permanent. Most of the major leagues in North America, including the NFL, NBA, and NHL, are currently in recess. This has seen a decline in all sports betting markets across the United States, not just New York.
To prove this effect, New York actually remains the best performing betting case in the country despite posting its worst monthly total in July. Its biggest competitor, New Jersey, has yet to release its July numbers, but Garden State saw handling of just $633.2 million in June, dwarfing New York’s total of $1.06 billion.
Like New York, New Jersey’s mobile handle has fallen since March. The country has not exceeded $1 billion over the past three months. This is the same downtrend seen in other major states, including Pennsylvania and Nevada.
The return of the NFL and NCAA in September can’t come soon enough for the sportsbooks. It will also provide a strong indication of whether the drop handle is simply a result of lower betting options. In a sign of the importance of these contests, New York had its second-highest March score for March Madness, when residents placed bets totaling $1.64 billion.
While the lack of sport may be temporary, New York faces an even more troubling challenge in terms of marketing. Analyzer Quote by New York Post in februaryAnd the He claimed that teenage athletes in New York lost about $200 million due to massive marketing spending. According to the analyst, Caesars Entertainment and DraftKings were spending about $100 to $150 per customer through welcome bonuses.
I was lucky not to win my New York license.”
Undoubtedly, this tactic has paid off, with Tom Rigg, CEO of Caesars, confirming that the operator has taken twice as much bookmakers as expected. However, marketing spending has been coupled with a 51% tax on total sports betting revenue, eroding the bottom lines of already struggling operators. This prompted a sports executive to tell Mail: “I was lucky not to win my New York license.”
American Sports Betting Association President Bill Miller has described American sports betting’s battle for market share as an “unsustainable arms race,” and it’s surely starting to unfold that way in New York. A number of sportsbooks have announced advertising cutbacks. This includes Caesars, which has incurred huge losses in its digital sector throughout the year to date.
As these major operators begin to connect again with marketing, this could be detrimental to public engagement because potential customers are less exposed to sports match ads.
worst on the horizon
Due to many factors, including the pandemic and the war in Ukraine, sports bettors across the United States are also facing a rising cost of living and even a possible recession. In fact, according to Bloomberg Economist Survey, the chances of a recession in the next 12 months are as high as 48% in the United States. This means more layoffs, fewer jobs, and higher interest rates.
When bettors start to get upset with these issues, they have less money to spend to bet on their favorite teams. For now, gambling industry executives believe that this has not significantly affected the sector. Speaking last month, MGM CEO Bill Hornbuckle said the business has continued to grow in Las Vegas at least, although he believes the effects are on the way.
Once again, September will provide a leading indicator of whether this effect is already evident in New York. For now, only time will tell.