New York online sports betting can launch on Saturday as state regulators have approved DraftKings, Flutter’s FanDuel and Rush Street Interactive as operators.
The remaining applicants continue to work towards satisfying requirements necessary for launch: Bally’s, Kambi, Genting Malaysia’s Resorts World, MGM and Entain’s BetMGM, PointsBet and Wynn.
Estimates for annual sports betting revenue in New York exceed $1billion, though the 51 per cent tax rate will take out a big bite. The four casinos' current retail sportsbooks generated revenue of $1.719m in November.
Edward Engel of Roth expects New York to be a negative catalyst and lead to EBITDA losses of 1.3 times revenue, combining the high tax and the expected aggressive marketing by operators.
That could offset profitability in other states this year, particularly pushing DKNG’s EBITDA below expectations, he said.
Cannibalisation from neighboring states New Jersey and Connecticut, which have lower tax rates and higher profitability, is also a risk for operators as those states can generate 25 to 30 per cent EBITDA margins while New York breaks even, he said.
Source: Fantini's Gamng Report