New York bettors staked more than $2.4 billion with online sportsbooks in September, a 5% increase from a year earlier, even as regulated-gaming advocates argued that sports-event contracts on prediction markets were drawing activity away from licensed operators.
The higher handle did not translate into higher operator winnings. New York’s online sportsbooks recorded $159.4 million in September revenue, down 17.7% year on year, as hold fell to 6.6% from 8.4%, according to Covers. The state received $81.3 million in sports-betting tax during the month, taking its year-to-date total to nearly $900 million.
FanDuel accepted $904.7 million in September wagers, 14% more than a year earlier. DraftKings took $840.1 million and Fanatics $266.8 million. Earlier in September, as we reported, the first week of the NFL season alone produced nearly $595 million in wagers but only about $17 million in revenue.
The broader trend was also upward. Through September, betting volume was 3.7% ahead of the prior year, an increase of roughly $697 million in stakes. In the first six months of the state’s fiscal year, which began in April, handle reached nearly $12.6 billion, up 6.9% from the comparable 2025 period.
Revenue over that six-month period moved in the other direction, falling 5.8% to $1.1 billion as the aggregate sportsbook hold declined from 10% to 8.8%. That divergence between betting volume and revenue has occurred before this year: the Office of the State Comptroller said June handle rose 36.6% year on year to more than $2.2 billion, while gross gaming revenue fell 43.5%, partly because successful wagers on the New York Knicks’ NBA championship produced large payouts.
Representatives of New York’s regulated gaming sector have said federally regulated prediction markets divert wagering from state-regulated sportsbooks. Kalshi and Polymarket maintain that their users trade contracts with one another rather than gamble against a house.
The American Gaming Association has taken a sharper position, alleging that the platforms provide illegal sports betting beyond state and tribal regulatory structures while avoiding licensing, consumer safeguards and gaming taxes. Its website estimated that states had lost nearly $1.6 billion in gaming-tax revenue since prediction markets began offering what the association called “back-door sports betting” in late 2025.
New York’s dispute with Kalshi remains active. The state Gaming Commission issued Kalshi a cease-and-desist letter in October 2025, and a federal court in Manhattan rejected the company’s request to pause that order on July 8. Later that month, the governor and attorney general sued Kalshi, alleging it operated illegal gambling in the state; regulators have since asked a Manhattan court to enforce investigative subpoenas seeking information on its sports contracts, advertising and access for people under 21.
Mobile sports betting generated $1.3 billion in New York tax revenue in the 2026 fiscal year, making it the state’s second-largest gaming-revenue source after the lottery, according to the comptroller’s office. The office also noted that mobile wagering is restricted to people aged 21 and older, while prediction markets can be available to participants from age 18.
