Do you think the regulation of online sports betting in New York has caused a dilemma with sportsbook operators and will affect the offerings given to customers?
Well, I don’t know much of a dilemma they will be in, but they are going to be in what should be (or could be) the highest market in the country. Right now, New Jersey seems to pull in the most handle every month but I imagine New York will be able to overtake that later on in 2022. I guess what would make life difficult for them would be the higher tax rate at 51%, one of the highest rates in the country. This is one thing, but it could be offset by just the amount bet each month; it’s to be determined. That would be the only difficulty I could see for any operators conducting business in New York.
In terms of the higher tax rate, who do you think will struggle more, operators or the customer?
If anyone, it’s going to hurt New York sports bettors. The high tax rate is really going to limit the offerings sportsbook operators can give customers. It may impact the line slightly; you could see people still going into New Jersey. These offerings could be worse, but never underestimate the convenience of betting from home or from your couch. We are not going to know until online sports betting develops in New York over time.
Just how big of a deal is the new launch for sportsbooks? Is it significantly better than your average market launching because it's New York, or is it similar to other states in many respects?
It’s a huge deal, it is going to be the largest market at least since New Jersey legalised several years ago. It could potentially overtake New Jersey once all nine operators are up and running in full capacity. The nine operators did not launch at once, with the state instead going for a staggered launch where a couple would go live and another handful would go live after.
Other than Florida, California and Texas, this is going to be the biggest market that offers online sports betting, it will absolutely have an impact on the sportsbooks and on the operators that are legalised now to offer sports betting in New York. I would imagine, if things go well, they could offer up other licences and bring in other operators; that is definitely a possibility. It will be interesting to see how things progress now that the market has kicked off.
What are the chances people may still end up going to New Jersey if regulations are proven too tight?
Right now, it’s hard to tell, I’ve seen reports and there have been studies that say upwards of 20% of bets placed in New Jersey each month are simply from New Yorkers going into the state to place them. It will reduce in New Jersey, obviously when New York offers its sports betting program. But why cross over a bridge and make a 20-minute drive one-way when you can simply bet from your house one morning?
We are going to have to see reports from New York on their handle when it’s up and running, and then we will be able to accurately tell how much of an impact it has. It definitely will, but just how much remains to be seen.
What hurdles are still ahead for online sportsbooks as they go live?
Well with it launching in January, with the goal to have it running smoothly by the Super Bowl on 13 Feb, hopefully not a lot. Any hurdles? I would say it was just a matter of the state approving where each sportsbook server would be housed, they have to be housed in one of four casinos, I believe; that would have been one of the final hurdles.
I know there was internal control work to do and be approved. But this is really the finish line. All of the big regulatory hurdles were met earlier and now it’s a matter of fine-tuning everything as the market is lifting off the ground.
And with XLMedia, what are you guys looking forward to most from the newly regulated state?
I know it’s going to be one of the biggest markets in the country, if not the biggest. I think everyone at XLMedia is thrilled that we have finally been able to launch in such an important state for the US.