by
This time of the year, with only days left on the 2024 calendar, is perfect for reflecting on the what-ifs. Not only for the year that’s passed but what’s ahead too.
Though the lens of California sports betting, we can ponder the potential of the industry which is a sleeping giant if you ask us. If the state were to do this right, there’s no reason why it couldn’t be the number-one legal sports betting market in the entire nation.
Right now, New York betting holds that distinction. They just posted some insane numbers that got us thinking just how much California is missing out on by not legalizing. Let’s recap those figures first then bring it back to California.
New York Sets An Industry Record For The Whole Country
New York has consistently set betting records in sports since it launched in January 2022. However, the latest it smashed might be the most impressive.
The New York Gaming Commission posted $231.7 million in revenue for November 2024. This is the most-ever reported anywhere in the United States for a month-long period. This is a huge revenue jump too. We mean, it beat the previous record — also set by New York in January 2024 — by 9.5 percent. Even looking at the year-over-year figures, New York was up 53.5 percent.
Two things contributed to the all-time record. One, was Thanksgiving. The holiday is synonymous with NFL action, but now even more so. During that weekend, New York netted $592.9 million in bets. This is the most ever bet during a single week — more than the previous high of $576.1 million during the last week of October.
The second and perhaps bigger reason was just a higher hold percentage — as in the money that’s kept after paying out winners. NFL (and partly NCAAF) is largely responsible for the betting uptick and during November, there were fewer upsets or bad outcomes for the sportsbooks. Obviously, that’s bad news for bettors, but a boom to the state and operators.
On Track For A Billion Dollars
Actually, there’s a third reason for the November success: New York has the highest tax rate for sports betting country-wide at 51 percent. So when bettors are staking this much and the hold percentage is staying high, you know they’re making an absolute killing. In November, the state did $118.1 million for themselves. Not bad, eh?
With the monster number, the state is up to $965 million in taxes on the year. December’s toll will make them the first-ever state to cross the billy mark in a single year. For comparison’s sake, New York only did $860 million all of 2023.
Guessing The Size Of California’s Betting Market
Alright, back to California. Could it really have a market bigger than New York? On paper, yes, but the execution is the bigger variable here.
Let’s do the paper numbers first. California is the most populous state in the United States at a whopping 38 million. Sure, they may have lost residents over the pandemic but its population still outpaces a place like Texas, which is at 30 million. Want to know New York’s population? It has about 20 million, which is the fourth most (Florida is at three).
Because of this population and a booming yeah industry, California also has the best economy of any state in the U.S. Matter of fact, if California were a country, it would have the fifth-best economy in the whole world. Wowzers. On a per capita basis, it’s the second-largest economy. So yes, there’s a lot of money in the Golden State.
Not only that, but just look at the proliferation of sports teams in the state. There are 17 pro sports teams across the NFL, NBA, NHL, MLB, and MLS. Once the new MLS team from San Diego debuts, it’ll be 18. This is more than New York and its 12.
See what we mean? In every meaningful metric, California is bigger than New York — and it’s not really that close. But as we said, this industry’s level of success will depend more on how it’s legalized (if it ever is). Allow us to break it down in the next section.
California’s Success Hinges On Two Things
If California is to ever beat the numbers New York is doing right now, it needs to get two things right above all else.
The first is the tax rate. We’re not saying California has to match New York’s 51 percent, but it can’t underprice itself either. At the bare minimum, it should be 40 percent, this would put it in line with Illinois — a high, but not eye-gouging rate.
The second variable, and this one is bigger, is how it’s legalized. You see, California has a heavy presence of Native American casinos. The belief is any legal sports betting market would have to flow through them. Maybe they partner with commercial operators like FanDuel or maybe they don’t. But if the tribes are going to run this thing, it has to offer mobile sports betting. It can NOT be retail betting only, which is the norm for most tribal-run sports betting states. Look at other states and bettors overwhelming choose to bet on mobile versus brick and mortar locations.
If California gets both things right — an above-average tax rate and fully mobile sports betting — there’s no telling how massive this industry could be. Per year, two billion in tax profits is within reason. Seriously!
Best Betting Sites 