New York Sports Betting Gamblers Win Big In October

The month of October saw New York sportsbooks reach new heights in terms of the total amount wagered. With $2.3 billion placed in bets, representing a 15.7% increase compared to the previous year. This marked the fifth time since the legalization of sports betting in January 2022 that the handle surpassed the $2 billion mark.

Year-Over-Year Comparison

The growth can be attributed to several factors, including the ongoing popularity of the NFL season, college football, and the World Series, which drew significant attention from bettors. The increase in wagering was not only a year-over-year success but also reflected a 12% rise from September’s figures, which also crossed the $2 billion threshold.

Operator Revenues Take a Hit

Despite the impressive handle, the revenue generated by New York’s online sports betting operators was less than stellar. Collectively, the nine major operators reported revenues totalling $176.3 million in October. While this was a 6% increase from the previous year, it represented a 13.9% decline from September’s revenue figures.

The hold percentage, which measures the revenue retained by sportsbooks after winning bets are paid out, fell significantly. In October, the hold dropped to 7.6%, a notable decrease of more than two percentage points from September.

Bettors’ Winning Streak

The success of bettors was particularly pronounced during two consecutive weekends in October, where sportsbooks faced unprecedented losses. The absence of significant NFL upsets contributed to this trend, leading to a combined operator win rate of less than 5% in the week ending October 13 and an astonishingly low rate of below 2% the following week. This marked the lowest non-Super Bowl week hold ever recorded in New York.

The financial implications of the betting landscape extended beyond operator revenues. New York’s state coffers benefited from a 51% tax rate on sportsbook gross revenue, resulting in an impressive $89.9 million in tax revenue for the month. However, this figure was down from the $104.4 million collected in September, reflecting the challenges faced by operators in maintaining profitability.

October also marked the first full month of operations for ESPN BET in New York. The platform, backed by PENN Entertainment, generated a handle of $40.8 million and gross revenue of $3.2 million, placing it seventh among all operators for the month.

ESPN BET’s performance was slightly overshadowed by BetRivers, which reported a handle of $45.8 million and gross revenue of $3.5 million. Despite the strong brand recognition of ESPN, the newcomer faced challenges in carving out a significant market share against more established sportsbooks.

Since launching at the end of September, ESPN BET has accumulated $44.8 million in wagers and produced $3.34 million in revenue. The platform will need to enhance its offerings and marketing strategies to compete effectively with other sportsbooks in the competitive New York market.

Among the operators, FanDuel and DraftKings continued to dominate the New York sports betting scene. FanDuel reported an impressive handle of $907.6 million, marking a 15.7% increase month-over-month. This figure is significant, as it is only the second time an online operator has surpassed the $900 million mark in New York.

Despite the high volume of bets, FanDuel’s revenue fell from $98 million in September to $77.3 million in October, reflecting a hold of just 8.5%. The decline in revenue highlights the challenges faced by even the most successful operators when bettors experience a winning streak.

DraftKings also achieved a milestone in October, reporting its highest-ever handle in New York at $813.7 million. However, a hold of 7.4% resulted in $58.9 million in revenue, marking the sixth consecutive month in which DraftKings has generated at least $50 million in profits.

Other operators in the New York market also reported varying degrees of success during October. Fanatics Sportsbook, which replaced PointsBet earlier this year, recorded a handle of $178.4 million, achieving its highest monthly total since launching.

The performance of BetMGM and Caesars was less impressive, with both operators recording win rates below 7%. The competitive nature of the New York market necessitates that operators continuously innovate and enhance their offerings to attract and retain bettors.

As November commenced, the trends observed in October appeared to persist. In the week ending November 3, New York’s online sports betting operators recorded a total handle of $558.4 million. This marked the third consecutive week where the handle exceeded $500 million, reflecting the sustained interest in sports betting.

Despite the high volume of bets, the hold remained below double digits, resulting in a win rate of just 9.4%. This translated to $52.3 million in revenue, representing a 10.1% decline week-over-week.

FanDuel’s revenue for the week increased by $3 million from the previous week, reaching $26.9 million. However, the handle fell from $240.5 million to $230.9 million. DraftKings also reported a significant handle of $183.3 million, but it was one of several sportsbooks that experienced a week-over-week decrease in revenue