Could Florida Someday Surpass New York Sports Betting?

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New York sports betting

The Empire State broke its own US record for online New York sports betting handle in November, taking $2.1 billion in wagers. 

Yet Florida has the potential to surpass the online New York sports betting market for the No. 1 spot in the country, according to the man helming the state’s lone legal sportsbook.

“I think it’s certainly possible,” Hard Rock CEO Jim Allen told CNBC last Wednesday. “What’s unique about Florida is, (it’s) a state of 21-22 million people, but much more importantly the tax rate is much more competitive here. The tax rate in New York is over 50%. And frankly companies like ours didn’t even pursue (a bid) because they had a (51%) tax rate, and honestly you cannot make money.” 

New York sports betting stats last year

In its first year of operation, Gov. Kathy Hochul announced that online sports betting generated $909 million for New York, including $709 million in tax revenue and $200 million in licensing fees. 

During fiscal year 2022-23, the nine operators in the Empire State took in $715 million in combined net revenue.

DraftKings Sportsbook and FanDuel Sportsbook combined for 68% market share and 74% revenue share.

Gaming analyst compares NY and FL

Gaming analyst Jordan Bender projects Florida will generate $1.3 billion to $1.5 billion of gaming revenue at maturity. That is compared to $2 billion if the market were competitive, rather than its current monopoly. Bender projects New York to generate $2 billion at maturity. 

“Certainly those are numbers we have seen,” Allen said. “I think when you have the conversation, you have to look at it with solely sports betting, which is now the scope that we legally have available to offer to the general public. But certainly that number gets significantly higher if iGaming is eventually approved in the future.” 

Another online gaming attempt in NY

In New York, Sen. Joe Addabbo and Assemblyman Gary Pretlow are planning to introduce an online gaming and online lottery bill as the calendar turns to the 2024 legislative session.

The Empire State is facing a $4.3 billion budget deficit, and online gaming could bring in $1 billion annually. 

“It is a starting point for negotiations, or a conversation, if the Governor wants,” Addabbo told LSR

Lingering concerns about online gaming bill

There are three concerns surrounding online gaming. 

Hard Rock wants NYC casino

The Hard Rock Bet app went live to the entire state of Florida on Tuesday. And from Thursday through Monday, six Seminole casinos will debut in-person sports betting. 

Hard Rock is also pursuing one of the three downstate casino licenses in New York, alongside Mets owner Steve Cohen. The $8 billion casino and entertainment complex would be adjacent to Citi Field in Queens. 

Lower tax rate catalyst for land-based pursuit

Allen said the tax rate was the reason to pursue a land-based opportunity in the state. 

“The guidance that we’ve seen for the land-based opportunity in downstate New York is that tax rate is going to be somewhere between 25-35%,” he said. “So certainly at those numbers it makes it a little bit easier to get return on investment.”

New York sports betting tax rate issue

Addabbo is open to conversations around New York’s online sports betting tax rate. 

However, operators who have complained are the same ones who negotiated and agreed to the 51% rate. And they have yet to provide a compelling argument for change.

“You give me a credible fiscal reason why we should tinker with the No. 1 product in the country right now, that just broke another national record in October,” Addabbo said. “You give me a credible fiscal reason why we should lower the tax rate and increase the number of vendors, I think we should be all ears in terms of listening to that conversation but I don’t see it.” 

New York sports betting award futures

As for the award future bets (MVP, Cy Young), Addabbo said, “I want to look at that.” 

Just getting a bill off the ground would be a step forward on that front.