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New best friends? New York online sportsbooks lean on Buffalo Bills playoff run

Lance Pugmire

Doing successful business in New York will be a chore for the nine online sports betting companies approved to operate in the face of the Empire State’s daunting 51% tax rate. 

The house is known for scoring its share of victories, however, and sportsbooks followed the first triumph of setting up shop before the start of the NFL playoffs by capitalizing on Western New York’s beloved Buffalo Bills. 

An extended playoff run by the Bills would complement the newness of legalized online sports betting in the nation’s fourth-most populous state and likely generate a mother lode of activity during the books' opening month. 

“When you couple the appetite with the fact that bettors can stay home now instead of crossing the border to New Jersey, the Bills being in the playoffs is very helpful. And if they get to the divisional round, that could be massive,” said Max Bichsel, the vice president for U.S. business at New York Bets, a consumer information portal where bettors can find and evaluate the various licensed operators of online sports betting. 

Tipico Sportsbook has the Bills as a 3.5-point home favorite Saturday night over the rival New England Patriots for what will be the teams’ trilogy meeting this season and their first postseason clash since 1963. 

Bills-Patriots III will be played in freezing, blustery weather in Orchard Park, N.Y., and the AFC East champions are expected to capture a groundswell of betting support in their snowy region while the populated boroughs, including Manhattan and Brooklyn, wager to their hearts’ delight.

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BetMGM ambassador and avid Bills fan Ariel Helwani said "New York’s only football team is alive and well, so the timing couldn’t be more perfect!”

Bichsel projects New York will surpass $500 million in online sports betting this month and could eclipse the $771 million frenzy that Arizona generated its first two months of business. 

“Simply put, anytime local teams have a playoff run, it is a great thing for sports betting and the sportsbook in that state,” said Kevin Hennessy, a spokesman for Fanduel, which joined DraftKings, Caesars Sportsbook and Rush Street Interactive taking online bets from New Yorkers on Saturday.

Jason Scott, vice president of trading for BetMGM, which is among the five other books to open in New York before the Feb. 13 Super Bowl, said a Bills playoff game is the ideal event “to introduce and engage” the public as March Madness looms. 

New York is seen as the new cash cow of sports betting among the 18 states where it's legalized. 

“New York is a cultural touchpoint," Hennessy said. "Beyond this being our home, we always felt once New York made it legal, other states would start following suit.”

New York’s rollout of betting begins with politicians promising to earmark funds for education and youth sports upgrades — something cynical citizens were previously told about the state lottery. One report projected New York’s annual revenue from sports betting to exceed $165 million. 

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To the question of whether New York’s staggering tax will be precedent-setting to other states, including California, Bichsel expressed doubt. 

“Part of it has to do with the previous governor (Andrew Cuomo)," Bischel said, "And New York has a different attitude on just about everything in comparison to other states, like Arizona, Florida and Michigan, where tax rates are not only less prohibitive, but helpful. Those states do a lot to promote the business. 

“New York has done the opposite of that with its severely high and punitive tax rate. But New York is such a big market, you can’t not play there.” 

With sportsbooks investing heavily in start-up expenses and advertising, Bichsel predicts the true implications of the New York tax rate will be known by next year. 

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For now, the books operating in New York aren’t limiting the free-bet promotions they offer to customers in other states. That’s imperative, he said, to ensure New York bettors don’t return to their former ways of crossing the state line to bet in New Jersey or returning to business with the neighborhood bookie. 

New Jersey reported Friday a whopping $10.9 billion in online betting.  

Buffalo resident Rick Glaser expressed doubt his many old-school, non-transient neighbors will detach from their bookies to bet online. 

“The local books have more generous spreads," Glaser said. "The bets aren’t subject to being taxed by the state and you have credit to bet and then settle up at the end of the week.”

But publicist and lifelong Bills fan Kelly Swanson said she was lured in by sportsbook advertising, creating an account that offered her a $200 credit for making a $5 bet on the Bills that she won last weekend. 

“I’m not a gambler, but that was a pretty nice introduction to New York state betting — hard to refuse the offer,” Swanson said. “I am sure people are trying their luck with those ‘gimmes.’ The Bills mafia have been going crazy over the Bills for decades, but this year, the energy is up a notch and infectious; it’s a good thing a New York team is in the playoffs to attract customers.

"The way they are promoting it over the airways, social media and around town makes it impossible not to know it’s happening and real.” 

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That powerful advertising reach to the large and diverse population that includes some of the world’s richest individuals is part of the books’ gamble to profit in the face of the tax burden. While Pennsylvania is charging online sportsbooks a 36% rate, Nevada and Iowa take just 6.75%. 

“The fact that New York has 20 million people helps (the state) do this, a lot,” Bichsel said. “I don’t think a 51% tax rate would be successful if you apply that to North Carolina, Maryland or Ohio. It just wouldn’t work. And New York is sort of a closed shop with just nine books allowed.” 

Caesars Sportsbook, which will set up a retail betting outlet at Madison Square Garden, reported its point spread and total did not move despite the betting traffic the game created. 

In summarizing her enthusiasm for the game, which convinced her 28-year-old nephew to travel through the conditions from New York City, Swanson uttered words the online sports betting companies can warmly relate to this winter. 

“Go Bills!”