ALBANY, N.Y. — More than $2 billion in wagers. Nearly $80 million in tax revenue. And a quarter of the entire nation’s mobile-sports wagers on the Super Bowl.
Such are the eye-popping statistics coming out of New York since the state opened online betting in early January and easily surpassed Nevada, the nation’s gambling mecca, and New Jersey, which captured the No. 1 spot in mobile sports betting after legalizing in 2018.
New York’s sudden transformation into the biggest bookmaking market in the nation is part of a stunning post-Covid reversal of fortune for the gaming industry as a whole. It is also a sign of the fast-growing appetite for sports betting in New York and across the country, a development that deeply worries addiction specialists.
Americans wagered more than $57 billion on sports in 2021, a record, according to the American Gaming Association, even as casinos and other gambling outlets — which had been battered by pandemic lockdowns — rebounded with their highest-grossing year ever. Mainstays like table games and slot machines led the way.
In New York, where new tax revenue from online bets has quickly shot past projections, gamblers have laid down more than $2.4 billion in bets through Feb. 13, including a staggering $472 million in the week ending with last Sunday’s Super Bowl.
That frenzy has been encouraged by a blizzard of promotions from betting platforms, including oversized payoffs, risk-free bets and thousands of dollars in free betting credits deposited in players’ accounts, all of which may spell short-term losses for many companies, according to industry analysts, as platforms battle for market share.
At the same time, the thirst for betting action has sparked alarm among groups focused on problem gambling: They say that the ease and speed of mobile sports betting — including the ability to place a wager on individual plays in a game — have the potential to entrap newcomers and tempt those trying to recover.
Indeed, the state Office of Addiction Services and Supports says that it has already seen a 46 percent increase in calls to its gambling helpline this January, compared with the previous January, amid new public awareness campaigns about responsible gaming.
For the state’s finances, however, mobile sports betting has been nothing but a win thus far. Operators pay a 51 percent tax rate on gross gaming revenue — the difference between what they take in from bettors and what they pay out.
As of Friday, New York had already taken in some $78.5 million from that tax, far more than the $49 million that the state budget office initially estimated it would receive in the first three months of 2022. That estimate has recently been increased to $108 million, and the state also expects to collect some $200 million in license fees from operators.
“It’s our first month, ever, and we’re at $2 billion,” said State Senator Joseph P. Addabbo Jr., a Democrat from Queens who serves as the chairman of the committee on racing, gaming and wagering. “It’s amazing. The astonishment of these numbers: It’s incredible.”
And new options for gambling may be on the way. Last week, the New York Yankees president, Randy Levine, expressed support for a betting kiosk at Yankee Stadium, following the lead of other professional sports franchises. Such a plan would be part of a broader expansion of wagering into stadiums, racetracks and arenas, something that Mr. Addabbo and his Assembly counterpart, Gary Pretlow, a Westchester County Democrat, are seeking to legalize this year in Albany.
The pair, Mr. Addabbo said, will also be pushing for an expansion of new brick-and-mortar casinos — with on-site betting parlors — something backed by Gov. Kathy Hochul, another Democrat, with many developers clamoring to put a casino in New York City.
Part of New York’s big debut stems from its size; of the 20 states now allowing residents to gamble on their phones, New York is the most populous, with potentially larger players like Texas and California still sitting on the sidelines.
But the demand for betting in New York is undoubtedly intense: Roughly a quarter of the nation’s mobile bets on the Super Bowl came from inside the state, according to Sportshandle.com, citing analysis by GeoComply, a Canadian geolocation security firm.
“New Yorkers are passionate sports fans and have been active sports bettors,” said Bill Miller, the president of the gaming association. “They just didn’t have a legal option. And now they do.”
Supporters of sports betting say that new betting platforms in New York and elsewhere are a part of a legal integration of longtime illegal betting options like offshore betting sites and street-corner bookies. And in some states, the pandemic may have sped that transition, amplifying a desire for online gaming in the wake of Covid-related closures and precautions.
Other were blunt in their analysis of New York’s early success. “I don’t think we’re overly surprised by the numbers coming out,” said Colin Mansfield, a senior gaming analyst at Fitch Ratings. “People like to gamble on sports.”
That demand was also probably whetted by a long wait for New York gamblers, who watched enviously as New Jersey, Connecticut and Pennsylvania all legalized placing bets on a mobile phone or laptop in recent years. Since the state’s first four betting sites launched on Jan. 8, just as the N.F.L. playoffs were looming, more than two million unique player accounts have been utilized in the state, according to GeoComply, with more than 245 million transactions.
Many of those users are capitalizing on alluring offers from operators: Caesars Sportsbook was particularly generous — or outlandish, depending on your point of view — offering a dollar-to-dollar match on deposits to player accounts, up to $3,000, in addition to a $300 sign-up bonus.
It’s a strategy that left Alan Woinski, a gambling industry analyst and consultant, bewildered. He said that such promotions were “the most ridiculous thing I’ve ever seen in my life,” noting that “the demand was going to be there.”
“It’s great for New York, its pretty damn good for the bettors, it’s an absolute disaster for the operators,” Mr. Woinski said. “It’s war. They’re killing each other.”
Such come-ons also worry Michelle Hadden, the assistant executive director of programs with the New York Council on Problem Gambling, who said that many of the bettors who signed up in recent weeks were new to gambling, including young people who are “not educated, not prepared and easily swayed by the advertising.”
Ms. Hadden added that mobile sports betting is particularly pernicious, because it’s “a hidden addiction,” which is easy to engage in but often hard to detect.
“You can’t smell it on somebody’s breath, you’re not going to see them stumbling,” she said, adding that even those problem gamblers who might avoid casinos now can access instant betting anywhere: “Literally everything is on their phone.”
New York’s mobile gambling law — passed last year as part of the state budget — called for some $6 million to be devoted to gambling addiction services every fiscal year, though the amount is a tiny fraction of what is spent on alcohol and drug treatment. By contrast, the budget Ms. Hochul proposed in January — a record $216 billion — has an increase of $402 million in operating aid and capital projects for the Office of Addiction Services and Supports, in large part to address the ongoing opioid crisis in New York.
For decades, professional sports leagues were resistant to betting, fearing game-fixing or other criminal mischief, a wariness that dates back to at least the Black Sox scandal at the 1919 World Series. But they have recently warmed to it; betting, after all, adds drama to even mediocre games, meaning viewers — and advertisers — stick around.
“They’ve all turned around because the flood of money is so large,” said Harold L. Vogel, a longtime gambling industry analyst.
Football has long been the most popular betting sport, but gaming companies have been increasingly creative about finding new bets for people in slower sports like baseball and golf.
Some bets, of course, have bordered on the absurd, including a Super Bowl offer on what color the Gatorade would be when the eventual winning coach was doused. (It was blue.)
As New York has leapt to the top of the board, analysts say they have yet to see a drop-off in betting proceeds in neighboring states like New Jersey. But even ardent supporters in New York say they anticipate that the state’s hot streak will cool after March Madness — which includes dozens of high-stakes college basketball games in a monthlong tourney — ends in early April. Analysts also anticipate that some of New York’s impressive numbers are a result of “free money” as a result of the early promotions, some of which are likely to decrease or disappear in coming months.
Richard Schwartz, the chief executive of BetRivers, which has betting platforms in New York and several neighboring states, says the market’s actual size will be clearer in the fall, just about when the college football and N.F.L.’s next season kicks off. “You need around six months for the market to stabilize,” he said.
Mr. Pretlow, the Assembly chair of racing and wagering, agreed that there would be a decline in “handle” — the Vegas term for the amount of money wagered — in months to come. But he also believed that bets would keep rolling in.
“New Yorkers have always wanted to do this,” he said. “And it’s happening now.”
