Sports Betting Stocks Trade Up As New York Mobile Sports Betting Plans To Goes Live
Mobile sports betting is officially scheduled to go live tomorrow in the city that never sleeps, with New York regulators giving operators the green light to open their doors ahead of the NFL playoffs.
The Empire State approved online and mobile sports wagering in April, but legislators were slow to draft the proper framework, nearly thwarting operators’ plans to cash in on the largest betting day of the year.
Four sports betting operators have already been granted approval to participate in the jurisdiction, with Caesars Sportsbook, DraftKings, FanDuel, and Rush Street Interactive all racing to offer wagers prior to the weekend kickoffs.
Per the New York State Gaming Commission, five other operators have applied for licenses to operate in the state, but each has yet to fulfill the full list of requirements. Each of these shops will see their applications addressed individually once they have fully complied with the commission’s request. Bally Bet, BetMGM, PointsBet, Resorts World and Wynn Interactive make up the five operators forced to sit out the opening weekend. Penn National and their Barstool Sportsbook failed to make the cut.
DraftKings sportsbook is aiming to be the first to open its doors, with the company announcing a targeted Saturday launch. Rush Street Interactive also plans to see their BetRivers online product up and running by tomorrow morning.
Much has been made about the potential value lying in arguably one of the largest untapped markets in the United States, but the steep taxation rates being applied to the gaming sector will undoubtedly make it difficult for operators to offer their traditional promotions while hoping to turn profits.
Analysts have projected that the New York sports betting market value could top $1 billion in annual revenue by 2025, with the state cashing in on $500 million in tax revenue alone.
While these numbers sound promising, the state’s greedy cut has limited some of the hype seen by investors looking to back brands in this sector.
Sports betting stocks had responded favorably when former NY Governor Andrew Cuomo expressed his interest to bring the practice to the state, and April’s approval further drove share prices higher.
News of this weekend’s launch did see most publicly traded sportsbook stocks increase, but not at the rate they did when the legislative news originally broke.
As of today, Caesars is trading up 4%, with DraftKings close behind at 3.7%. Ballys, still pending final approval, saw shares go up 3%, with Penn National, Wynn and MGM all up close to 1.5%.
With the race for market share now set to begin, investors are keen to see which companies can corner this prized market and more importantly at what cost.
Marketing spending have long put a damper on operators’ financial returns, and the cost to advertise in the Big Apple coupled with the state’s steep tax rates will undoubtedly lead to lopsided financials for the foreseeable future.