End of the Road for Catskill OTB in New York

It’s been another hugely successful year for the betting industry in New York. However, it’s not been good news for everyone. Earlier this year, Wynn Bet ceased operating in the state. The end of November saw the Catskill Regional Off-Track Betting Corporation (Catskill OTB) close down. It had been in operation for close to half a century.

The Catskill OTB gave gamblers the opportunity to place bets on horse racing. This was either online at Interbets or at some locations in Hudson Valley. November 30 was the last day when they accepted bets. That ended 48 years of running their business. It wasn’t the greatest of surprises as the company had been struggling financially for the past few years. 

The pandemic didn’t help them at all. Before that took place Catskill OTB used to serve 13 counties in New York. Due to lockdowns that were imposed, their betting parlors were closed. Post pandemic they have only been taking online bets and a small number of restaurants. 

The betting parlors didn’t reopen leading to financial struggles. They tried to get help from the New Jersey state legislature and considered filing for bankruptcy. Launched in 1976, Catskill OTB raised $746 million for the racing industry and New York government. 

It’s been a tough few years for off-track betting in New York. The legalization of mobile sports betting has hit them hard and in October, a record $2.32 billion was wagered with online sports betting sites. That wasn’t just a record for the state of New York but the US and 14.9% higher than that recorded in October last year, reports New York Bet.

Despite the huge amounts being gambled, it hasn’t been a good year for WynnBet who on July 30 ended taking bets in the state. They had been operating in New York since February 2022 but the company has been struggling and not just in New York. They closed their operations in ten jurisdictions in the USA.

During their two-and-a-half years operating in the state, WynnBet took $233 million in bets. That only produced revenue of $11.3 million. Of the nine operators in New York (the maximum number permitted), that placed them seventh in terms of bets taken and eighth on the revenue list.

They have been replaced in New York by ESPN Bet who are owned by Penn Entertainment. Around $25 million was paid by Penn  in February 2024 for the license. That’s the same amount WynnBet paid for the license to operate in New York.

While New York’s online sports betting industry is flourishing, there is one problem that companies have to face. That’s the tax rate for online sportsbooks which at 51% is the highest in the US.

September 23 saw the New York State Gaming Commission vote in favor of transferring the license to Penn Entertainment.  It had been hoped that the approval would have been given earlier allowing an August launch in time for the start of the new NFL season.

Just a few days after approval was given, ESPN Bet was launched in New York. That saw them begin to take bets as week four of the new NFL season took place. There are three New York teams in the NFL and that produces a great deal of revenue for the state’s online sports betting industry.

The launch in New York meant that ESPN Bet is now available in 19 US states for sports betting. Five states also have their online casino.

Their first full month of operating in New York was in October with gamblers wagering $40.8 million with the new online sportsbook. That produced gross gaming revenue of $3.2 million which was a 7.84% hold. 

Penn executive vice-president, chief strategy and legal officer and secretary is Chris Rogers. Speaking about the launch in New York, he said the company attracts “a different kind of bettor” and expects to “grow the market” in New York. They do not have any relationship with colleges and have no intention to market their business to those who aren’t old enough to gamble.

The arrival of ESPN Bet in the state follows the launching of the Fanatics Sportsbook in March of this year. They took over the North American assets of PointsBet in August 2023. October saw them earn a revenue figure of $12.4 million from the $178.4 million taken in wagers. That would have delighted the company as it was their best result since the launch took place.

The nine companies offering digital sports betting in New York are now:  FanDuel, DraftKings, Caesars Sportsbook, BetMGM,Ballys, Resorts World, ESPN Bet, Fanatics Sportsbook and Rush Street Interactive. The most successful company is FanDuel who in October earned revenue of $77.3 million putting them ahead of DraftKings on $58.9 million.