BetMGM chief revenue officer Matt Prevost thinks the era of operators spending wildly on marketing, advertising and promotions like they did in order to acquire NY sports betting customers is all but over.
“Anyone who lived through the New York launch saw the craziness of the offers. I think those days are waning,” Prevost said at the Sports Business Journal Media Innovators conference.
Yet, nearly a year after the Jan. 8 launch, one NY legislator introduced a vague bill amendment to the committee last week. It “directs the NYS Gaming Commission to promulgate rules and regulations regarding predatory sportsbook bonuses in mobile sports betting.”
Justification for NY sports betting bill
Sen. Pete Harckham introduced Senate bill S9605. Harckam cited a recent group of articles done by the New York Times as the reason for the bill.
“The mobile sports betting industry is utilizing targeted advertising that is personally tailored to lure in new customers from right within their homes,” the bill justification reads. “This means that following legal sports betting in New York State, multitudes of people who were not formerly presented with these predatory practices will fall susceptible to gambling addiction that could have otherwise been avoided.”
Initially, Caesars was offering a $3,000 match deposit bonus, as it attempted to gain market share in the Empire State. Those massive offers no longer exist. Currently, Caesars trails FanDuel and DraftKings in NY market share.
Before the February Super Bowl, New York Attorney General Letitia James urged players to be vigilant when it comes to avoiding deceptive advertising from online sports betting companies.
As of now, $6 million in tax revenue from NY online sports wagering has been set aside to combat problem gambling. The NY Council on Problem Gambling said in Sept. 2021 it believes $20 million is more appropriate to tackle the issue.
Sen. Harckham’s vague claim
Harckham also included the following unsubstantiated line:
“In New York, gambling companies accepted thousands of bets on lower-division football and basketball games, even though they were supposed to be off-limits.”
Currently, NY has a betting ban on in-state college teams.
LSR attempted to seek clarification on specifics. However, Harckham did not respond to an email and a Twitter direct message Friday morning.
No college advertising for BetMGM
Prevost said BetMGM will not advertise on college athletics.
“I do think that direct involvement of our industry with universities is kind of a no-fly zone for us as a brand,” Prevost said. “I think others have entered into that space, whereas we’re not going to venture there as a brand.
“We just don’t think seeing our brand presented on a perimeter board at a college basketball game, where a quarter of the fans are underage, is a good look for the brand. I know others have ventured into that space. We will stay off that as a self-regulation a bit.
“We’ve seen a movement in the UK. If you go too far, there is a natural backlash. And we want to be as responsible as operators as we can.”
NY sports wagering tax rate debate
Several industry executives have cited NY’s 51% tax rate for online sports betting as the reason they pulled back their spend in the state and directed those funds elsewhere. Those executives were well-aware of the tax rate when they became licensed in the state, having proposed and agreed to the levy.
They continue to push for a tax reduction via lobbying and legislative efforts.
“Somebody has to make a credible, realistic argument that tinkering with the 51% is actually going to benefit the state,” Sen. Joe Addabbo recently told LSR.
NY crushing tax revenue goals
From Jan. 8-Nov. 27, NY online sports betting operators have combined for $14.4 billion in handle, $1.2 billion in total gross gaming revenue and $616.1 million in tax revenue.
For perspective, Gov. Hochul’s enacted budget projected NY online sports betting operators would combine for $615 million in tax revenue during FY 2023 (April 1, 2022 to March 31, 2023.) Operators are currently on pace to surpass that projection.