Although many might think that bookmakers are making real fortunes in New York, now that they are legal in the state, the reality is that they are rather having large expenses.
De In fact, they’re probably even losing money since they launched on January 8. The amount of said loss could amount to $200 million dollars, according to an anonymous industry analyst who spoke to the New York Post.
The reason for this is that operators like Caesars and Draft Kings have to spend a lot to attract players to their apps. Remember that these bookmakers offer between $150 and $150 for each new customer.
In addition, the State of New York imposes a large tax of 51% on the gross income of the bookmakers, which further reduces your profits. Likewise, sports betting houses have also had to pay the 51% tax on the promotional money they gave to new customers.
Until now, the bookmakers have attracted more people than they expected, but this has been costly, as they offer promotions in which they offer up to $3,000 ‘free’ dollars if a player deposits $3,000 of their own money, as is the case of the Caesars app, for example.
Since online sports betting began operations in January, between 1.5 and 2 million new accounts have been opened.
At Caesars alone, the company has signed up over half a million new customers in New York since its launch. “Volumes in New York were about double what we expected,” said the company’s CEO, Tom Reeg.
Caesars’ last earnings period ended in December, so its results since the state legalized online sports betting in January are not available, but the industry analyst who spoke with The New York Post said the company almost certainly lost money on its New York operations.
Caesar’s declined to comment on earnings figures, but said it has already reduced its $3 promotions, Gift. Now offering $300 in free bets on the first bet of $20 from a new customer.
The analyst also calculated that the house of betting DraftKings has lost about $50 million in New York from the launch of January 8 to the week ending 000 February.
DraftKings CEO Jason Robins said he expects the company to turn a profit within two to three years. The company’s shares have fallen more than 15% in the last week.
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