A study commissioned by the New York State Gaming Commission has provided revenue estimates for a legal online and retail sports betting market in the Empire State.
The commission first requested the study in September 2019 and planned to publish the results three months later. A number of delays, however, meant the body only published the 345-page report last week. Spectrum Gaming Group conducted the analysis with the aim of forecasting the impact of changes to New York’s gaming market.
could generate between $816m and $1.14bn in annual gross gaming revenue
The study’s publication comes as lawmakers in the Empire State consider the legalization of mobile sports betting. Spectrum estimates that a combined retail and mobile New York sports betting market could generate between $816m and $1.14bn in annual gross gaming revenue (GGR).
Further details of the study
Last week, Governor Andrew Cuomo reaffirmed his support of a state-run model for New York mobile sports betting. The study’s revenue estimates are based on the introduction of an open market with multiple operators.
Spectrum forecast New York sports betting revenue for the first six years of “full-scale sports wagering.” The study estimates that mobile and retail sports betting could generate $332m to $406m in its first year. Spectrum expects this to increase significantly over the following years, to a maximum of $1.14bn in the sixth year.
The study also anticipates that as a result of sports betting growth over the six years, state tax revenue from the market will also increase. Spectrum expects the market to generate between $74m and $104m in tax by year six. The figures are based on a tax rate of 10% on sports wagering revenue.
The progress of mobile legislation
The door opened for New York mobile sports betting earlier this month after Gov. Cuomo delivered his State of the State address. The governor said a legal sports betting market would help the Empire State in its financial recovery following the COVID-19 pandemic.
Despite Cuomo’s newfound support for mobile betting, the optimal model for such a market is still up for discussion. The governor believes a lottery-controlled model would bring in the most state revenue. Robert Mujica, New York’s budget director, has backed this view. He estimates a state-run market could generate $500m annually for the Empire State.
Legislators are currently attempting to pass two bills which would set up an open market with multiple providers. Senator Joseph Addabbo Jr and Assemblyman Gary Pretlow proposed the legislation on January 7. If passed, bills S1183 and A1257 would allow the state’s gaming commission to issue a request for proposal, after which it could select multiple providers.
The Senate voted both bills out of committee last week.