New York Online Sports Betting: Gov. Andrew Cuomo Fully On Board, But Wants Lottery Model
Photo credit: Al Bello/Getty Images. Pictured: New York Governor Andrew Cuomo
UPDATE, 12:30 p.m. ET: Cuomo said he wants to run sports betting through the state lottery, and not casinos. That’s led to a disastrous one-operator model in places like Washington D.C., which has struggled to generate much revenue.
A lottery model means only one sportsbook would operate, leading to less competition, worse pricing for consumers and little to no innovation.
Gaming lawyer Daniel Wallach said the lottery model isn’t possible under the state’s constitution, though.
Operators of course favor a model where they can partner with casinos, as do most consumers.
“We are encouraged by Governor Cuomo’s most recent statements regarding sports betting in New York. We are keenly interested in reviewing the details of the proposal and look forward to legislation that creates a competitive mobile marketplace,” Matt King, CEO, FanDuel Group said.
“We have seen in other states that a model with competition among experienced operators is critical to maximizing state tax receipts and consumer choice. We look forward to working with the Administration and the New York State legislature to bring mobile sports betting to the residents of our home state in a manner where everyone wins.”
We’ll continue updating this story as things play out.
ORIGINAL STORY: Well, it finally happened.
Pressure of neighboring New Jersey turning into the new sports gambling capitol of the nation combined with budgetary issues from COVID-19 have led to New York Governor Andrew Cuomo finally embracing mobile sports betting in the Big Apple.
The details are not yet clear, but Cuomo acknowledged he would finally address the fact that New York had not embraced mobile sports betting. A statement from Cuomo was published in the New York Daily News early Wednesday morning.
“New York has the potential to be the largest sports wagering market in the United States, and by legalizing online sports betting we aim to keep millions of dollars in tax revenue here at home, which will only strengthen our ability to rebuild from the COVID-19 crisis,” Cuomo said.
Just last month, Cuomo in a news conference acknowledged sports betting as a way to close the budget gap for the very first time.
New York State senator Joe Addabbo has been imploring Cuomo’s aids to take up sports betting handle, as New Jersey is set to break the all-time yearly record when final numbers are reported next week. The previous record of $5.3 billion was set by Nevada in 2019.
In February 2020, FanDuel and DraftKings, who were lobbying the state to allow online betting, proposed scenarios of taxation that, according to research firm Eilers & Krejcik, would generate more than $200 million for the state. Without mobile, the firm said that the state was realizing just 5% of its full potential. DraftKings’ stock was up more than 6% in pre-market trading on the news Wednesday.
“I’m thankful for the Governor moving mobile sports betting in New York closer to crossing the goal line,” Addabbo told The Action Network. “I now await the details.”
Four upstate casinos had already been given approval to take sports bets when the Professional and Amateur Sports Protection Act was rolled back by the Supreme Court in May 2018, giving the states the right to decide whether they wanted to legalize sports gambling.
Despite pleas, Cuomo decided not to add any new revenue generators to the 2020 budget, meaning that mobile sports gambling was not an option. That left even more money on the table due to COVID-19 physical restrictions at retail locations.
In November, New Jersey generated more than $930 million in sports bets, with more than 90% of it bet online.
New York does not report monthly sports betting handle, but because there is no mobile betting, the state has been passed 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 not be a big overhaul to any bills needed, Addabbo said. This would be solved by putting servers for mobile betting at the retail locations that already are approved mobile betting operators.
So while there’s no firm timeline for online betting to launch, there isn’t a ton standing in the way with Cuomo on board.
“Those are some of the details that I hope to work with the Governor’s office in the coming days. I’m hopeful his administration is just as enthusiastic and energetic about implementing mobile sports betting in our state as I am,” Addabbo said.
The four casinos already approved in update NY would be the first in line, and the state could immediately grant three more licenses that can be expedited.
There are a few natural fits for immediate operators.
- BetMGM, since Empire City Casino at Yonkers Raceway is owned and operated by MGM.
- DraftKings, which has a deal with Resorts World in New Jersey and currently runs retail betting at del Lago Resort & Casino in Waterloo, N.Y.
- FanDuel already runs the retail sportsbook at Tioga Downs in Nichols, N.Y.
- Rush Street Gaming, owners of Rivers Casino & Resort Schenectady, and online operator BetRivers.
- Fox Bet has a deal with the Mohawk Tribe, which runs the Akwesasne Mohawk Casino Resort in Hogansburg.
- Caesars struck a deal with the Oneida Tribe, which operates Turning Stone.
New York’s initial 2020 budget, which did not include any new sources of revenue, including sports betting, sought to account for a $7 billion budget deficit. But due to COVID-19, the shortfall rose to more than $17 billion and Cuomo said it was closer $50 billion when considering deficits for others, such as local municipalities, including the MTA.