The legalization of online sports betting is changing in the United States. At the time of writing, sports betting is legal in 32 states, but mobile wagering is only legal in 18. Regulators in New York state officially legalized online sports betting in 2021. It comes with a catch, though. The state has only issued licenses for nine operators: DraftKings, FanDuel, Resorts World, and online branches of industry giants MGM and Wynn. The legalization of online betting is a big deal for the state of New York. The industry is expected to generate over $1 billion in annual revenue, and annual tax revenue is projected to hit $493 million by 2025.
Changes in Sports Betting Legalization
New York Governor Andrew Cuomo made mobile sports betting legal in April 2021. It’s been legal to place in-person bets for years, but the closest sportsbook casino to New York City has remained over two hours away. Many gamblers have chosen to cross the Hudson River into New Jersey to place mobile bets, which have been legal in that state since 2018. The New Jersey Gambling Commission that over 20% of New Jersey’s sports betting comes from New Yorkers crossing the border.
The licensing approval for nine online operators by the New York State Gaming Commission changes the face of New York sports betting. Two groups of gambling companies, including Caesars Sportsbook, Wynn Interactive, Resorts World, Bally’s, and BetMGM, now have the right to operate in New York. These licenses came at a high cost. Sportsbooks are being taxed 51% of their gross gambling revenue from New York betters. Platforms awarded licenses will also pay a $25 million licensing fee.
New Yorkers Have to Wait
The governor legalized mobile betting, and the Gaming Commission approved licenses, but they haven’t handed out the licenses yet. They will be issued on January 8, 2022, just in time for New Yorkers to place mobile bets on the 2022 Super Bowl.
Licensed operators will need to find a facility approved by the Gaming Commission to house their servers to start taking bets. According to the law, these servers must be located inside one of New York’s four commercial casinos, and operators will have to pay a $5 million annual fee to that casino.
New York is home to one of the largest and most important markets in the United States, and recent law changes reflect this. Bills proposing the legalization of marijuana have also been passed.
New York Sports Betting Timeline
January 6, 2021: New York Governor Andrew Cuomo declares his support for online sports betting.
April 6, 2021: State legislators passed a budget bill that allows mobile and online betting in New York.
November 8, 2021: The New York State Gaming Commission awards online sports betting licenses to nine sportsbooks
January 8, 2022: Online sports betting launches in New York.
Illegal Betting Still Thrives
While many New Yorkers are thrilled about placing legal bets on their favorite sporting events, illicit sports betting is still alive and well. According to the American Gambling Association, over 7 million Americans placed bets with a bookie in 2021, and approximately 11 million gamblers will bet at a legal sportsbook location.
But now, New Yorkers have a choice, as online sports betting is expected to take over $1 billion in revenue away from illegal bookies and put it in the hands of licensed operators. It’s a step that allows for legal gambling enterprises to compete and push out the illegal market.
