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New York mobile sports betting set to kick off

Yahoo Finance's Josh Schafer details the mobile and digital sports betting services being approved for operation in New York and compares the sports gambling revenue tax rates across New York, New Jersey, and Pennsylvania.

Video transcript

[MUSIC PLAYING]

ZACK GUZMAN: Well, last year, 2021, we saw a huge explosion in the online sports betting world as more states move forward with those plans, including New York, which has accelerated the opening of its sports betting here in the state. Actually kicking into gear for some gaming companies this weekend. And for more on that, I want to bring on Yahoo Finance's Josh Schafer with a closer look at that.

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And Josh, you and I were just talking. You know, New Jersey's early sign up bonuses were pretty large. I think I remember seeing $5,000 in free bets coming through. Not the case for a lot of the New York early offers. Just about $100 I think I just saw on FanDuel, but big nonetheless.

JOSH SCHAFER: Yeah, there's kind of not the eye-popping, I think, deals that people would hope for for New York, but it's going to be $100 for FanDuel and DraftKings. Those are two of the companies that will be opening up their sportsbooks on Saturday. So four of the nine mobile sports gambling books that were cleared to be in New York are going to open this Saturday.

The big ones here are Caesar's Sportsbook, DraftKings, FanDuel, and Rush Street Interactive. FanDuel is, of course, owned by Flutter. And the ones that won't be in this weekend, but are eventually coming, are Wynn Interactive and BetMGM, among a few others.

The big thing to note with New York is Penn National Gaming, which had a rough 2021 as a stock, hasn't been approved at all for New York. New York is the biggest market yet to approve sports gambling and Penn won't be a part of that at all. It'll be interesting to see, Zack, kind of how this impacts some of these stocks.

I mean, DraftKings is down nearly 50% over the last year. Flutter is down about 30%. Caesar's hasn't done quite as bad because they have the exposure to Vegas as well and some brick-and-mortar. But those stocks have kind of needed a little bit something to keep it moving and this could help that.

The one thing to look out for here that is pretty big is the state tax. So New Jersey only taxes revenues at a 14.25% rate. Pennsylvania is at 36%. New York is going to come in with a 51% tax rate. So while these companies are going to get pretty big exposure, how much it actually can help them from a profitability standpoint is kind of yet to be seen.

AKIKO FUJITA: I mean, Josh, you mentioned, this is by far the biggest market to legalize sports betting. How much are we talking about? I mean, I've seen numbers around $10 billion.

JOSH SCHAFER: Yeah, it's going to be hard to figure out mainly because too, Akiko, like, so you look at New Jersey, which had a billion dollar handle month in September, and October, and kind of through the fall during those big key months, right? So that could totally expedite and kind of become what New York is and New York's obviously even a bigger state.

But New York is-- or New Jersey had bettors coming from New York that were going over to New Jersey. Experts have estimated that maybe 20% of New Jersey's billion dollar worth of a handle in a month was coming from New York. So kind of is that going to be-- have we already seen those bettors in the market and then they're just coming to New York, I think is something to watch here.

And the other thing too is there's going to be some big events to bet on coming up, right, with the Super Bowl and kind of the end of the NFL season. But football is the big winner in US sports and betting and New York is only going to have the tail end of that. So these numbers might not be quite as eye-popping as people are expecting through the first six months as football goes quiet.

ZACK GUZMAN: Yeah, I think there are a few members on this team even who may have played their part in New York's representation there of New Jersey's bets, but appreciate that. We're going to see what happens. Obviously, it's prime time for football bets. Wisconsin's pride and joy, Josh Schafer, bringing us the latest there. Appreciate that.