ew York already has hit the heights since launching mobile sports wagering in mid-January. Now the Empire State will make its first descent into madness.
March Madness, that is.
When the New York State Gaming Commission releases its full February figures, the state’s two monthly handles of 2022 will rank first (January) and second (February) in the all-time national post-PASPA era that began in 2018. Not everyone anticipated such a fast start, with many expecting New York to need time to mature before reaching the top of the list and becoming, in the words of Frank Sinatra, “A-number one.”
The Super Bowl, which is the largest single sports betting event in the U.S., has come and gone, and conventional wisdom suggests New York generated the highest handle of any state — but nobody knows for sure, since the NYSGC did not provide official handle and revenue figures from the game. March brings the NCAA Tournament, joining the Super Bowl in the top two of annual betting events and unmatched in terms of drama coming from all angles at a frenetic pace over the course of three-plus weeks.
The largest unofficial betting event in the form of office pools now takes center stage in legal fashion in New York. Eight mobile operators, entrenched to varying degrees, will offer Final Four futures wagers and more, plus various betting lines on up to 66 of the tournament’s 67 games.
After bettors showed a monstrous appetite for the Super Bowl, wagering will again be robust throughout the final two weekends of March and the first one in April. After examining weekly mobile handle figures in New York since launch, basketball-specific wagering across multiple states from 2019 through 2021, and other assorted factors as points of comparison, NY Online Gambling projects mobile betting handle in the Empire State on the NCAA Division I Men’s Basketball Tournament will be between $375 million and $400 million.
That’s wagers to be placed at legal online sportsbooks in New York after the NCAA announced the seeds and brackets on Sunday. Using the industry standard win rate of 7%, mobile operator revenue from that handle would range from $26.3 million to $28 million. With New York’s 51% tax rate on mobile revenue, the state would receive between $13.4 million and $14.3 million.
The NCAA Tournament vs. The Super Bowl
Projecting the Empire State’s NCAA Tournament handle can be challenging. New York has generated weekly handle that would rank in the top 10 nationally for monthly handle every full week since launch. The nearly $360 million in handle for the week ending March 6 was the fourth week in five that New York has posted handle between $350 million and $360 million.
The outlier in that stretch was Super Bowl week, in which handle totaled $472.1 million. The NYSGC does not break out handle by sport or divulge any specific wagering information about the game, but the Super Bowl handle may have been at least $200 million. That is a reasonable, conservative estimate, given Nevada set an all-time high with nearly $180 million wagered on the game and New Jersey went from $117.4 million in 2021 to $143.7 million this year despite all those Manhattanites no longer needing to cross the Hudson River to place legal bets.
Is the Super Bowl relevant for March Madness comparisons? Yes and no. One can view the NCAA Tournament as a singular event, but it also consists of 67 single-game events. A more like-for-like comparison could be the NCAA Tournament and the NFL playoffs, in which 13 games are played.
The NYSGC launched on the weekend of Week 18 of the NFL regular season, producing an initial handle report of $171.3 million that covered only those two days. The six wild card round games the next week contributed to handle skyrocketing to $431.8 million in the first full week of wagering. The four divisional round games sparked another bump to $572.6 million. Notably, the Buffalo Bills played in both rounds.
Weekly handle ebbed the week of the two conference title games, falling to $449 million without the Bills, but that was still 28.3% higher than the recent low-end baseline of $350 million per week.
Assumptions of a similar percentage spike for March Madness could prove faulty for a few reasons, most notably advertising. The NFL has inherent advantages over the NCAA, with nearly all of its postseason games airing on network television. The league is also a marketing leviathan capable of making any superstar a national hero, recognized from the city where he plays to the casual fan hundreds of miles away who simply enjoys football.
This past NFL season, sportsbooks spent gobs of money to advertise their product, with the ability to promote themselves as “official league partners” or “approved sportsbook operators.” Of the eight mobile operators in New York, three (Caesars, DraftKings, and FanDuel) are official league partners and three others (BetMGM, PointsBet, and WynnBET) are approved sportsbook operators.
That advertising spend will not take place during the college basketball games broadcast on CBS and other stations. For starters, the NCAA does not have partnerships with gaming operators, and very few schools do.
cover image: credit Flickr/Steve Cheng, Bruin Report