Now you can legally guess on sports activities out of your mobile phone in New York, in time for the NFL common season finale

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Aaron Rodgers # 12 of the Green Bay Packers appears to prevail during a game against the Seattle Seahawks at Lambeau Field on November 14, 2021 in Green Bay, Wisconsin.

Stacy Revere | Getty Images

Legalized mobile sports betting is now live in New York.

FanDuel, DraftKings, Caesars Sportsbook and Rush Street Interactive, the first companies to be approved by the New York State Gaming Commission to offer mobile betting on sports games, can start their sportsbooks in the state today at 9 a.m. ET.

New York is the fourth most populous state in the United States and is now the largest state that legalizes sports betting. However, this does not result in an immediate cash injection into the coffers of the gambling companies. New York has an onerous tax of 51% on gambling income – far higher than New Jersey’s 13% tax rate. Research firm Eilers & Krejcik Gaming estimates that New York won’t replace New Jersey as the national leader in gross gaming revenue – the amount of money players minus the winnings they wager – until 2024.

That doesn’t change the long-term meaning of today’s metaphorical ribbon cutting, however, said Patrick Keane, CEO of The Action Network, a media platform for sports bettors.

“It’s arguably the biggest day in sports betting history,” said Keane. “And it’s magically positioned for the first and last 17-game seasons in NFL history.”

The last regular season games of the National Football League are scheduled for tomorrow. The launch gives New York sports fans an instant opportunity to download apps and place bets on the NFL, the most popular American sport to bet on. It also provides a valuable marketing opportunity for the top four companies who bring New York customers to their first bets with promotional offers.

Five other gambling companies – Bally Bet, BetMGM, WynnBet, PointsBet, and Empire Resorts – have a 10-year online sports betting license in New York but have not yet met legal and regulatory requirements to go live.

Sports betting is growing

By December, more than two dozen states had legalized sports betting, although some only allow personal gambling. FanDuel and DraftKings established themselves as early leaders in mobile sports betting, but national sales figures remain relatively low.

According to Eilers & Krejcik, US gaming companies generated total revenue of around $ 3.25 billion from sports betting in 2021. About 20% of those were from New Jersey – most of them from any state. New Jersey legalized mobile sports betting in 2018.

Investors expect betting stakes to surge as states like California and Texas prepare to vote on cell phone legalization. According to Eilers & Krejcik, annual US gambling revenues could grow to nearly $ 17 billion by 2026.

“Every state is considering legalizing sports betting like DraftKings,” said Matt Kalish, North America’s president and co-founder of DraftKings, on CNBC’s “Squawk Box” Friday. “The topic is extremely popular. In some of the recent referendums, such as Maryland and Louisiana, over 70% of the vote supported legalized sports betting. It’s a great way to increase tax revenues, create jobs in the state, and fund important projects. “

Souring investor sentiment

But high future taxes, like the 51 percent rate in New York, and rising marketing budgets have dampened the attractiveness of investors for the industry. DraftKings and PointsBet stocks have fallen more than 60% in the past 52 weeks.

With so many companies offering similar mobile sports betting products, companies have had to spend hundreds of millions of dollars to attract customers. A media executive told CNBC that he predicts a large sports gambling company will either go bankrupt or sell “for peanuts” this year, given the competition and the high cost of customer acquisition.

Disclosure: CNBC’s parent company Comcast and NBC Sports are investors in FanDuel.

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