New York: love it or hate it, it’s an influential cultural force. And despite its long-held influence over culture, the Empire State has exercised caution in its approach to online gambling. Sports betting came to New York in January, 2022, with various operators launching that month. Others followed in February, March, and later in the year.
New York, like many legal sports betting markets, has its sights set on online casinos. Here’s what legal New York online casinos could mean for revenue in the state.
New York Online Casinos: What You Need To Know
First and foremost, let’s set your expectations. New York online casinos are merely a twinkle in the legislature’s eye. Truth be told, online casinos are a hot-button issue, and despite strong sportsbook revenue (we’ll get to that in a bit), legislators are often hesitant to legalize sportsbooks’ casino cousins.
Opponents often cite myriad reasons for their stance, ranging from “it’s a vice” to (justifiable) concerns about responsible gaming. A lot of work must go into regulating the industry to bring profits to the operators, enjoyment to the players, and safety/resources to anyone who uses online casino apps.
New York State Senator Joseph Addabbo is the biggest proponent of legal online casinos. He was instrumental in bringing sports betting to NY, so it’s no surprise he’s already looking to the next online gambling frontier. He has said he intends to push for online casino legalization in 2023.
This is far from a guarantee, but there’s hope for New York online casinos to become a reality, no matter how distant that reality may be. In truth, it could be multiple years before legal online casinos launch in the Empire State. If and when they do, however, expect them to make a splash and bring in loads of revenue to the state.
To better understand the impact online casinos could have in New York, let’s look at two comparison points: New York Sports Betting and Michigan online casino revenue.
New York Sports Betting Revenue
In its first five weeks, online sports betting in New York drew in a whopping $2.4 billion in wagers. That’s not $2.4 billion in revenue, mind you, but it’s still a massive number that should showcase the scope of New York online gambling.
Recent months show us just how strong NY sports betting has been at bringing in revenue. Here’s a look at the past few months.
- June 2022: $72,420,864
- July 2022: $73,321,229
- August 2022: $99,602,193
- September 2022: $143,332,889
Big numbers, right? Here’s the catch, which is good in the long run for state revenue: 51% of operator revenue goes to NY. The operators keep the other 49%.
New York sports betting has been on a steady growth trajectory, and it doesn’t appear to be slowing down anytime soon.
If New York legislators push for a similar agreement for online casinos, the state could potentially double those revenue numbers.
There’s another option, which could lead to even more revenue. New York limited its sports betting licenses, so only select operators can run in the state. If the state is more freewheeling with its license allowances for online casinos, the revenue for such platforms could easily outperform sports betting.
All that said, sports betting isn’t quite the same beast as online casinos. Let’s turn our investigative lens to Michigan to look at the state’s early success with online casino revenue.
Michigan Online Casino Revenue
The Great lakes State legalized three forms of online gambling—sports betting, casinos, and daily fantasy sports—in one fell swoop. January 2021 brought the launch of numerous platforms in Michigan, and the months that followed brought more options for Michiganders eager to bet online.
January 2021 saw modest revenue for Michigan online casinos: $27,538,672. How is that modest, you ask? IT jumped to $77,188,016 in February 2021. It hovered in that general zone, give or take, for the remainder of 2021. December 2021 saw another jump, with revenue reaching $109,694,214, the first time Michigan online casinos earned more than $100 million. Numbers have continued to rise slightly, on average, constantly exceeding that $100 million mark.
This tells us that online casinos naturally gain more revenue over time. This makes sense, considering ad spend increases, players become familiar with their online gambling options, and more online casinos become available.
Michigan online casinos pay 20-28% of revenue in taxes. That’s a better deal than the New York sports betting operators get, but worse for the state in comparison.
Here’s the kicker: Michigan has a population of about 10 million. New York has a population of 19.8 million, nearly doubling Michigan’s. Add in tourism and business travel, and NY well outmatches its Midwestern counterpart in sheer number of residents and visitors.
In short, Michigan shows us how lucrative an online casino market can be. If New York emulates MI, it could stand to earn hundreds of millions in revenue.
New York Online Casino Outlook
It’s a lot of speculation and guesswork at this point, but New York online casinos could stand to bring in a hefty chunk of revenue for the state. Based on comparisons to Michigan and New York’s own sportsbook market, a legal online casino push in the Empire State could yield huge numbers.
Right now, it’s a waiting game. Legislative action takes time, especially in a state with such a large population. Time will tell what New York’s eventual online casino market looks like.