Study: New York is Losing $200+ Million By Not Legalizing Online Sports Betting
Ron Adar / Echoes Wire / Barcroft Media via Getty Images. Pictured: New York Governor Andrew Cuomo
Between $203 million and $286 million.
That’s the estimated range of money being left on the table by New York thanks to its paucity of retail sports betting options and its complete lack of online avenues, according to a new study released by market research firm Eilers & Krejcik.
The firm, in a report commissioned by New Jersey sports betting market-leaders FanDuel and DraftKings, who are lobbying for the state to allow online betting, proposes three scenarios of taxation using a projected amount of sports book licenses, from 7 to 10, being charged licensing fees of $12 million a year.
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The projections are being put forth as Gov. Andrew Cuomo’s budget discussions, that seeks to address a $6 billion budget deficit in the Empire State, do not highlight the legalization of online sports gambling as a remedy.
“This is not the time to come up with creative although irresponsible revenue sources to solve a problem which doesn’t really exist,” Cuomo said about using gaming to plug the gaps.
State Sen. Joseph Addabbo, the most staunch proponent of sports gambling in the state, told The Action Network that if online sports gambling is not in the state budget by the time it is resolved on April 1, it will likely not be approved until 2021.
Addabbo’s strategy is to get Cuomo’s attention by showing how much money New York has lost to neighboring New Jersey. The Garden State pulled in $4.6 billion in bets in 2019, 85% of Nevada’s handle, making Jersey the second-most valuable sports gambling state in the nation.
Based on activity with commuters as well as tourists from other sources of data including GeoComply, which tracks how close to state borders bets are being placed, Eilers & Krejcik estimates that New Yorkers bet $837 million on sports in New Jersey. When subtracting the payouts for wins using a conservative hold percentage, it’s an estimated $57.1 million in revenue for the operators and $6.2 million in tax revenue lost by New York to New Jersey.
As of now, New Yorkers can only bet in their state at four upstate casinos that were grandfathered in with a sports betting law in 2013, that was activated when PASPA was reversed by the Supreme Court in May of 2018. The first bet in New York was taken on July 17, 2019.