Online casino

New York online casino push, Caesars aims for profitability, Churchill Downs bets on horses

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The race for online gambling market share in the United States could accelerate further if online casinos are legalized in New York.

Online casinos in New York could be legalized if a bill sponsored by State Senator Joe Addabbo is approved. A vote is expected within a few weeks.

The bill would allow commercial casinos and tribal nations to operate online casino games in New York for a licensing fee of $2 million per operator for ten years. Operators could then choose two mobile casino platforms as partners, with each brand having to pay $10 million for a ten-year license.

Online casinos generate more revenue than sports betting in many states. For example, online casino and poker rooms in Pennsylvania generated $466.4 million in taxes on $1.3 billion in gross gaming revenue last year compared to retail and online sportsbooks. with a total of $122.5 million in taxes on $505.5 million in revenue.

Dustin Gouker, Network Chief Analyst: “Sports betting gets a lot more attention, but the tax revenue generated by online casinos in states where it’s legal dwarfs what sports betting generates. Where sports betting fluctuates with the seasons, online casino games are month after month.And in New York, which would almost instantly become the largest online casino market in the country, online casino games have the potential to become a significant and reliable boost to the state budget for years to come.

Sports betting operators in New York include FanDuel Sportsbook (OTCPK: PDYPY)DraftKings Sportsbook (NASDAQ:DKNG)Caesars Sportsbook (NASDAQ:CZR)Bet Rivers (NYSE: RSI)BeMGM (NYSE: MGM) and PointsBet (OTCQX: PBTHF).

Is the hunt for online gaming customers too bad for short-term profitability? A company going in a different direction is Churchill Downs (NASDAQ: CHDN)who announced plans to quit online casino and sports betting to focus on the more profitable TwinSpires online horse racing betting.

“The online sports betting and casino space is highly competitive with an ever-increasing number of participants that states have licensed,” noted CEO William Carstanjen. “Many are looking for maximum market share in each state with limited consideration for short-term or potentially even long-term profitability,” he added.

Caesars Entertainment (CZR) also emphasized on its conference call this week (transcript) that profitability will be a focus as advertising spend for sports betting will be reduced.

There is also a case to be made that Penn National Gaming (NASDAQ: PENN) is on a faster path to profitability due to its lower average customer acquisition costs for Barstool customers.

DraftKings is on Seeking Alpha’s Catalyst Watch next week with the company hosting a key investor event.