The prospect of New Jersey becoming the country’s new sports capital, combined with budgetary issues caused by the pandemic, has prompted New York Governor Andrew Cuomo to embrace online sports betting. So he recognized gambling as a way to close the budget gap for the first time.
“New York has the potential to be the largest sports betting market in the United States and, by legalizing online sports betting, we intend to keep millions of dollars in tax revenue here at home, which will only strengthen our ability to rebuild after the crisis of COVID-19, ”Cuomo told the New York Daily News.
New York Senator Joe Addabbo has urged the governor to take control of sports betting, as New Jersey is expected to break the all-time annual record when the final figures are released. The previous record of $ 5.3 billion was set by Nevada in 2019.
Companies promote online betting lobby in the state
In February 2020, FanDuel and DraftKings, who were lobbying together to allow online betting, proposed tax scenarios that, according to research firm Eilers & Krejcik, would generate more than $ 200 million for the state.
Without mobile betting, the company said the state was only exploiting 5% of its full market potential. DraftKings shares were up more than 6% due to recent news.
“I am grateful that the governor is working on mobile sports betting in New York, which is now closer to reality,” Addabbo told The Action Network. “I await only the details”.
Four casinos had already received approval to accept sports betting when the Professional and Amateur Sports Protection Act was overturned by the Supreme Court in May 2018, giving states the right to decide whether they wanted to legalize the gaming market.
Despite the calls, Cuomo decided not to add new revenue generators to the 2020 budget, which means that online sports betting was not an option.
New York was overtaken for not exploiting the full potential of the market
In November, New Jersey generated more than $ 930 million in sports betting, with more than 90% of the value coming from online betting. New York does not report the origin of monthly sports betting, but since there are no mobile bets, the state was surpassed in revenue by New Jersey, Nevada, Pennsylvania, Illinois, Indiana, Colorado and others.
“There are no constitutional issues with mobile sports betting in New York, so there would be no major overhaul on any necessary bills,” said Addabbo.
This would be resolved by placing mobile betting servers in retail locations that are already approved mobile betting operators.
Therefore, although there is no set schedule for launching online bets, there is not much difficulty in approving with Cuomo in favor.
“These are some of the details that I hope to work with the governor’s office in the coming days. I am hopeful that your administration is just as enthusiastic as I am about implementing mobile sports betting in our state, ”said Addabbo.
Issues with operators
The four casinos already approved in the New York update would be the first in line, and the state could immediately grant three more licenses. But there are some adjustments for operators:
- BetMGM, as the Empire City Casino at Yonkers Raceway is owned and operated by MGM.
- DraftKings, which has an agreement with Resorts World in New Jersey and currently manages retail bets at Del Lago Resort & Casino in Waterloo, New York
- FanDuel already runs sports betting retail at Tioga Downs in Nichols, New York
- Rush Street Gaming, owners of Rivers Casino & Resort Schenectady and online operator BetRivers.
- Fox Bet has an agreement with the Mohawk Tribe, which manages the Akwesasne Mohawk Casino Resort in Hogansburg.
- Caesars struck a deal with the Oneida tribe, which operates Turning Stone.
The initial New York budget for 2020, which did not cover any new source of revenue, including sports betting, sought to account for a budget deficit of $ 7 billion. But, due to COVID-19, the deficit has increased to more than $ 17 billion.
Cuomo prefers lottery system for online gambling in New York
Cuomo said he wants to place sports betting through the state lottery, not in casinos. This has led to a disastrous model of a single operator in places like Washington, which has struggled to generate revenue.
A lottery model means that only a sports bet would operate, leading to less competition, lower prices for consumers and little or no innovation.
Gaming lawyer Daniel Wallach said the lottery model is not possible under the state constitution. Operators, of course, prefer a model in which they can partner with casinos, as do most consumers.
“We are excited by Governor Cuomo’s most recent statements about sports betting in New York. We are very interested in reviewing the details of the proposal and look forward to legislation that creates a competitive market for mobile devices, ”said Matt King, CEO of FanDuel.
He added: “We have seen in other states that a model with competition between experienced operators is essential to maximize state tax revenues and consumer choice. We look forward to working with the government to bring mobile sports betting to residents of our state in a way that everyone wins. ”
