As of now, this freeze is temporary.
BetMGM Sportsbook shut down all of its promotional offers in New York on Friday.
The operator — a 50/50 joint venture between MGM Resorts International and Entain — didn’t disclose how long offers on BetMGM Sports NY would be unavailable or if the move is permanent. In a statement Thursday, it said the offers that it is shutting down include:
- Welcome Offers
- Special Offers
- Retention Offers
- Subscription Offers
BetMGM said it included all variations of Bet and Get/Win offers in the shutdown. Both are considered special offers by the operator.
“As of now, this freeze is temporary,” BetMGM said. “We will be reevaluating the viability of New York offers ahead of the NFL season.”
The operator added that players who click through affiliate links in New York would be “taken to the BetMGM NY lobby page. Any promo codes used in New York will still track users to affiliate accounts but will not award the user with any offer.”
BetMGM Diverted NY Marketing Spend to the Other States
BetMGM’s move doesn’t come as a surprise. The operator announced in May that it had decided to stop spending money to acquire players in New York.
During an investor day presentation in May, CFO John Deutsch said the state’s “unfavorable tax environment” had forced it to pull back on its pursuit of customers in the Empire State. Deutsch said the marketing spend for New York would be diverted to other states “with better economic returns.”
Assuming BetMGM took money meant to try to acquire players in New York for online sports betting and diverted it to other states for that exact purpose (and in the same vertical), five states likely got more money for their marketing efforts: Arizona, Colorado, Michigan, Tennessee, and Virginia. BetMGM has the largest market share for online sports betting in all five states.
Tax Rate High, But It’s Still New York
That said, the decision to stop spending money — and, as of Friday, to stop making offers — in New York was likely not an easy call for BetMGM.
Since the record debut of New York’s online sports betting market in January, the state has dwarfed all others in terms of revenue and handle — especially its three neighbors, Connecticut, New Jersey, and Pennsylvania.
But executives at BetMGM have long warned that the state’s 51% tax rate is prohibitively high. At the presentation in May, Deutsch also cited that the state levies the tax rate on actual revenue and phantom revenue associated with non-cash promotional wagering.
“We have hope that the New York tax environment will be updated, and we can then again more aggressively pursue New York players,” Deutsch said at the time. “Players would never continue to play if the house always won, and the house cannot continue to play if it’s always going to lose.”
Still, New York is also probably causing BetMGM frustration.
Despite the highly lucrative partnership it formed with Madison Square Garden Sports Corporation (MSGS) and Madison Square Garden Entertainment Corporation (MSGE) before the market opened, the operator hasn’t caught on with sports bettors.
Instead, FanDuel is the top operator in the state, and the competition isn’t even close — FanDuel held 61.1% of New York’s online sports betting market in April, compared to just 4.8% for BetMGM.
