Connecticut iGaming soft launch attracts players from neighboring NY
Created: 10/27/2021Updated: 11/19/2021
CT online gambling has only been live for a couple of weeks, but it already seems to be attracting NY sports and casino fans – and Gov. Hochul should pay close attention
Some fascinating data from iGaming geolocation specialist GeoComply was released in the past week.
GeoComply found that during the recent soft launch in Connecticut of online sports betting and casino products, a large share of the traffic and wagers actually came from the south-west corner of the Constitution State.
As much as 38% of the total traffic originated from the towns of Stamford and Bridgeport – particularly where they intersect with the I-95 corridor, the main route into New York state
This data strongly suggests that New Yorkers are willing to travel outside of the state to place legal online bets - and they won’t wait for the expected legalization of sports early in 2022.
But the GeoComply data also raises a couple of interesting questions about how the future will play out in New York and neighboring states, even once sports betting (and one day, casino) does get the go-ahead.
- We now know from the Connecticut data that New Yorkers are willing to cross state lines to place wagers online. It would be fair to assume that New Jersey has also been taking advantage of this phenomenon since it legalized online gambling in 2013. Just how much of the current online revenue of New Jersey comes from New Yorkers – and how much of that will disappear when NY and other states on the eastern seaboard go online? NJ had a record month for iGaming in September – it will be interesting to examine that data this time next year. We expect much of NJ’s revenue will leak back to New York.
- New York Governor Kathy Hochul is pushing for a minimum 60% tax rate on Gross Gaming Revenue for online sports betting in the state, with 64% mooted in recent days. How do sports betting sites normally react to such punitive tax rates on their GGR? Well, adding more juice to their money lines, point spreads, and parlays is the usual way. But the data from GeoComply suggests that NY sportsbooks couldn’t pull the same trick to the same extent. The tax on GGR in Connecticut is set at just 13.75%, which would allow sportsbooks in the Constitution State to undercut their NY rivals when it comes to gross margins. Could we see a situation where savvy NY sports bettors cross the Long Island Sound to place their wagers on the NFL and NBA at superior odds, even once sports betting is legal in New York? If the final tax rate too high, then it has to be a risk.
The USA is perhaps the most complicated online gambling market in the world. As more and more states legalize casinos and sportsbooks, then there will be inevitable clashes of interest between them - especially on the densely populated east coast. Still, competition is good for consumers (in this case, gambling fans), and tax competition is no different. We just hope state regulators in Albany can see that before pushing operators into working for uncompetitive tax rates.
