Overcoming New York’s internal and external challenges, SBC Leaders

New York

Issue 19 of the SBC Leaders magazine delved into a range of key issues across the gambling landscape, with new technologies, responsibility in slots design, Latin American differentiation, and a restructuring of the B2B technology partnership model all examined.

In addition to all of that, the much publicised introduction of New York into the US’ betting ecosystem was also too large to be ignored. So in a two-part special to be published on consecutive days, CasinoBeats revisits the debate.

The Empire State has dominated a huge chunk of the industry agenda since its much anticipated online sports wagering debut in January, with the record pace that has followed being well documented.

With a reported 1.2 million accounts created amid a deluge of betting across the five sportsbooks authorised a little over a week after the action began, it was only a matter of time before records across regulated US jurisdictions began to topple like dominoes. 

As more operators entered the fray on an as and when basis, Lindsay Slader, managing director of gaming at GeoComply, and Sarah Robertson, SVP of sales at Kambi, assessed the main talking points, potential threats, and which North American regions, if any, pose a challenge to New York.

SBC Leaders: Despite the wave of positive headlines, various potential issues were flagged across various quarters – including warnings that New York could struggle to reach its revenue projections. How can the jurisdiction overcome these?

Sarah Robertson: One threat to the state is the potential loss of customers who cross over to New Jersey and other states that have already regulated online sports betting, or that they continue to play with offshore operators. 

Early projections will only be reached if the New York market is competitive, and operators are able to offer an experience on par, or better, than neighbouring states and illegal sites. To ensure that happens, the ability to offer a competitive product to New Yorkers so that bettors have no reason to cross the border will be crucial. 

Regulators realize the need for operators to offer a high-class product to keep those who had been betting over state lines, and to ensure the legal market in New York can compete with illegal offshore bookies unconstrained by taxes and regulations. 

Lindsay Slader: We focus our attention on delivering the high-quality service, from geolocation to fraud prevention, that our customers rely on to keep their businesses running and successful. 

If we do our job, they can do their jobs, and ultimately New York will benefit from strong consumer protections and new revenues. 

SBCL: Looking further afield across the US, and North America in general, and presuming this early momentum is maintained, which state/s stand best poised to potentially challenge, and even overcome, New York? And why? 

LS: Population is generally a strong indicator of how well a market will perform. It doesn’t surprise us that New York has rocketed to the top of the list since it has 7 million more residents than the next largest state with legal sports betting (Pennsylvania). 

New York is also well situated for sports betting because it has so many professional franchises and enthusiastic fan bases. The next big states that could rival New York will be Texas and California.

SR: A couple of states in a potential position to supplant New York come to mind, such as California and Texas, but that will largely depend on the regulatory frameworks introduced. Population alone should put them in a position to compete with the Empire State as Texas is about the same size and California is nearly double that. 

These states also account for a combined 27 professional sports teams with dedicated fan bases who will be eager to place wagers on their teams. 

Furthermore, California is home to more gaming tribes than any other US state as well as the second most tribal-operated casinos, which could be another substantial revenue stream for the state depending on the regulatory framework it adopts. 

California is set to put sports betting legislation on the ballot later this year, but there are some talks of a market with only retail sports betting, which in our view would fail to capitalise on the mobile opportunity while providing a boost to the offshore market.

Author: Ava Harvey