Spectrum Gaming study predicts New York mobile betting revenue could hit $1.14bn

Spectrum Gaming Group has published its report on the expansion of gambling operations in the state of New York.

Spectrum Gaming Group has published its long-awaited study on the expansion of gambling operations in the state of New York and suggests that mobile sports betting in the Empire State could generate between $816m and $1.14bn in annual gross gaming revenue (GGR).

Spectrum Gaming’s report 

The report was originally commissioned by the New York State Gaming Commission in 2019 and was scheduled to be delivered in December 2019. However, the study was pushed back to June 2020 before being delayed indefinitely as a result of the coronavirus pandemic.

The 358-page report outlines potential returns for the state of New York, based on a range of different gambling expansion scenarios.

This report comes after New York’s Governor indicated that he will support efforts to bring online sports betting to New York.

Looking at sports betting

In regard to sports betting, Spectrum looked at several scenarios and provided projections for the size of the market within three to five years following the introduction of the activity.

Spectrum’s report revealed that if New York’s sports betting market does not change and continues to only permit land-based betting at tribal and commercial casinos, the state can expect to generate between $66m and $93m in annual revenue. This would generate between $4m and $5m in tax revenue for state coffers.

In the event of a limited sports betting expansion where in-person betting is still the only legal way to bet but off-track betting facilities and video lottery terminals are permitted to take bets, the state would see a massive jump in revenue. According to the projection, once the market reaches maturity in this scenario GGR would be between $212m and $296m and tax revenue would increase to between $19m and $27m.

The returns would grow exponentially with the implementation of online betting as Spectrum projects the vertical to generate between $816m and $1.14bn in revenue. Spectrum predicts that this would be the same whether the state permitted statewide mobile betting for commercial or tribal operators.

Spectrum did, however, note that if tribal operators were restricted to offering mobile betting on their lands, this would raise the state’s tax revenue. With this model in place, tax revenue would sit in the range of $74m to $104m.

If tribal operators were allowed to offer true statewide betting the states tax take would drop to between $72m and $99m. The report noted that both scenarios take the expansion of the land-based market into consideration.

However, Spectrum’s report does not consider the framework that New York Governor Andrew Cuomo is currently eyeing. Cuomo is pushing for a sports betting model in which one or more sports betting providers would be selected through a request for proposal. 

This would be similar to the approach taken in New Hampshire which saw DraftKings become the state’s sole sports betting operator.

Other verticals

The report also looked at the expansion of other gambling activities in the Empire State including online poker, casino and lottery games. According to Spectrum, these activities could generate up to $1.1bn in annual revenue once the market reaches maturity.

The report notes that poker would likely be the lowest revenue contributor with $60m followed by online lottery which is projected to generate $299m. Online casinos, however, would make up the majority of projected revenue with an estimated $750m coming from the vertical.

However, the legalisation of online gambling for commercial casinos would allow the state’s tribal operators to also enter the market. This means that approximately $730m of the projected $1.1bn would be taxable, this would then leave the state with $73m in tax revenue.

What about land-based expansion

The report also provided some insight into the expansion of land-based gambling based on several scenarios. All scenarios predict that the construction of new casinos or video lottery terminal facilities being turned into casinos would negatively impact the market.

Spectrum noted that a major land-based gambling expansion, which would see three downstate casinos opened alongside two video lottery terminal facilities, would hurt the market. 

Instead of increasing the tax take for the state, the expansion would likely see upstate venues close or reduce their staff numbers due to the increased competition in the state.

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