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State of the Union: US Sports Betting Update – New York Wants to be a Part of It

Legal sports betting is finally underway in New York after Rivers Casino in Schenectady flung upon the doors to its sparkling new sportsbook this week. Visitors to the 5,000 sq. ft. sports lounge can now wager on football, basketball, baseball, hockey, college sports and more in a safe, regulated environment. It covers pre-match, in-play and parlay bets, while there are 14 betting kiosks, dozens of TV monitors, club chairs, table seating areas and VIP booths.

The new sportsbook has created 25 jobs and it is set to provide a welcome economic boost for the city of Schenectady, which is 15 miles northwest of state capital Albany.  “It is indeed a historic day, not just for the state of New York, but for the city of Schenectady,” said Mayor Gary McCarthy. “As Rivers Casino grows, so does its positive impact on our community. The opening of Rivers Sportsbook will surely attract even more guests to the property and to our great city.”

A group of dignitaries including former New York Giants punter and Super Bowl champion Sean Landeta gathered for the opening ceremony. Pro-Bowl safety and New York Jets legend Erik Coleman and New York Yankee great Bucky Dent, a World Series MVP, were also in attendance. Assemblyman Gary Pretlow, a Democrat representing Westchester County, placed the first bet. “Right now, New Jersey is cleaning our clock when it comes to sports betting,” he said. “We’re a little bit behind.”

Garden State Leads the Way

In May, New Jersey edged ahead of Nevada to become the largest sports betting market in the U.S. It came just one year after the Garden State prevailed in its legal battle to overturn PASPA, the federal ban that previously prevented sports wagering in every state apart from Nevada. One major driver of the state’s early success is the strong performance of the brick and mortar FanDuel Sportsbook at the Meadowlands. It is in New Jersey, but it is just a few miles from New York City and it shares a home with the Giants and the Jets, so it attracts a large number of New Yorkers.

Yet the biggest reason for New Jersey’s strong performance is its thriving online market. Mobile wagers already account for more than 80% of the handle and revenue in the Garden State, with FanDuel and DraftKings enjoying a dominant position. New York will be unable to capitalise on that lucrative revenue stream, as state law only permits brick and mortar sportsbooks at a handful of casinos. They are also all located in upstate New York, many miles away from the Big Apple, so they are highly unlikely to pull footfall away from the FanDuel book at the Meadowlands.

Market Expected to Open Up

Yet this is just the start of New York’s foray into sports betting and the market should open up significantly in the months and years ahead. Major operators are piling in. Rivers Schenectady is part of the Rush Street Gaming empire, which also includes Rivers Pittsburgh and SugarHouse Philadelphia, the two best performing sportsbooks in the nascent Pennsylvania sports betting market. It opened its doors on Tuesday and FanDuel Sportsbook at Tioga Downs launched the following day. A live testing period concludes today and it will then enjoy a full launch this weekend.

We can expect concerted efforts from New York lawmakers to modernise the state’s sports betting legislation next year. Pretlow is committed to introducing mobile sports wagering when the legislature reopens, as is Senator Joe Addabbo. However, they may need another referendum to push it through.

The new sportsbooks in New York should see modest revenue over the next couple of months, as this is a quiet time in the U.S. sporting calendar. New Jersey’s sports betting handle dipped from $318.9 million in May to $273 million in June, while revenue decreased to $9.7 million. There is no basketball, football or hockey for bettors to speculate on right now, leaving just baseball, golf and tennis.

FanDuel led the way once again, consolidating its position as the most popular betting site in the largest market in the US. It earned revenue of $4.4 million during June, with $2.73 million coming its online offering and $1.7 million from its retail book at the Meadowlands. DraftKings’ retail sportsbook at Resorts Atlantic City made just $35,000 during the month, but its online betting site made $2.69 million, significantly closing the gap on its competitor. William Hill’s Monmouth Park sportsbook was the only other site to earn more than $1 million.

The Power of Digital

The importance of online sports betting was underlined in neighbouring Pennsylvania last month. SugarHouse became the first sports betting site to launch in the Keystone State when it went live in May and it enjoyed its first full month of trading in June. Rivers in Pittsburgh and Parx in Bensalem launched online sportsbooks in the final week of June, taking the total to three. That drove Pennsylvania to a record handle, despite it being one of the quietest months of the year for sports betting.

Its sportsbooks took a total of $46.3 million in June, eclipsing the previous record set in March. The Pennsylvania Gaming Control Board reported that more than 40% of money wagered in the state in June went online, despite only one app being live for the entire month. It suggests that the handle in Pennsylvania will soar when the football season begins and that online will account for the lion’s share of the activity, as is the case in New Jersey.

Spreading Like Wildfire

The number of states with legal sports wagering continues to swell and New Hampshire is the latest to join the party. Gov. Chris Sununu signed H 480 into law after it passed through both chambers last month. The new law creates a Division of Sports Wagering to regulate the state’s sports betting industry, and it will form part of the New Hampshire Lottery Commission. It will dish out up two 15 licences, of which five will cover retail sportsbooks and 10 will be online, following a bidding process from operators.

North Carolina is on the brink of becoming the next state to give legal sports wagering the green light. The House voted 90-27 in favour of permitting sportsbooks at two casinos run by the Eastern Band of Cherokee Indian tribe this week. It passed through to Senate back in April and it now heads to Gov. Roy Cooper‘s desk to be signed into law. “I’ve been a champion for expanding gaming opportunities for the Eastern Band of Cherokee Indians for years,” said Senator Jim Davis said. “They’ve been a great economic generator for the Western region of our state, and I’m happy to play a small part in the good they do for this region.”

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