New York’s mobile sportsbooks are feeling the squeeze. Gross gaming revenue fell 18% year-over-year in May to $204.2 million, according to figures released Monday by the New York State Gaming Commission. The state pocketed $104.1 million in tax revenue, but the underlying story is less about punters stepping away and more about operators struggling to hold onto their winnings.

Hold Rates Tell the Real Story

Here’s what’s actually happening: New Yorkers wagered $2.13 billion in May, down just 3.6% from the same month last year. That’s relatively flat. The real damage comes from sportsbook margins. The statewide hold rate dropped to 9.6% from 11.3% a year ago. That’s a serious compression. Operators are paying out more relative to what comes in, which explains the revenue nosedive despite steady betting activity.

FanDuel and DraftKings continue to dominate, controlling roughly 69% of the state’s betting handle. DraftKings saw revenue slip 21% to $66.5 million on $706.5 million in handle. FanDuel, the market leader, dropped 18.5% to $88.7 million despite recording $767.8 million in wagers.

Winners and Losers

The picture wasn’t uniformly bleak. Fanatics and Bally Bet posted year-over-year gains. In fact, they were the only two operators in the state to do so. Fanatics handled $249 million (up 30.6%) and grew revenue 1.8% to $18.3 million. Bally Bet’s May was genuinely impressive, with revenue surging 77.3% to $1.1 million on $14.1 million in handle, up 17.3% from May 2025.

Everyone else struggled. Caesars took the hardest hit, with revenue plummeting 28.6% to $9.8 million. BetRivers and the Score Bet also suffered significant declines, down 24.7% and 19% respectively.

What’s Driving the Margin Compression

Several factors probably explain the lower hold rate. Increased competition is pushing operators to offer tighter odds. More sophisticated punters are shopping around. And there’s the explosive growth in proposition betting, which typically carries lower margins than traditional moneyline and spread bets. Lawmakers have already started paying attention to prop bet popularity, with some eyeing legislation to study potential risks.

New York’s cumulative mobile sports betting handle has now exceeded $95 billion since launch. That’s genuine scale. But scale without healthy margins is a problem, frankly. Operators will be watching June and beyond carefully to see if May represents a temporary dip or the start of a troubling trend.

What the team thinks

Sheena McAllister says:

Baz has identified a crucial distinction that often gets lost in headline-focused coverage, and it’s one we see playing out across regulated markets including the UK. The hold rate compression he’s highlighting reflects healthy market maturation rather than operator distress, as competitive pressure forces sportsbooks to offer better value to punters while maintaining sustainable margins, which ultimately strengthens consumer confidence in regulated offerings. What’s particularly interesting from a compliance perspective is how this dynamic incentivises operators to diversify revenue streams and improve operational efficiency rather than chase risky promotional practices, creating a natural regulatory advantage for well-capitalised, compliant operators over the long term.