Conflict over mobile bill
New York’s lawmakers have attended a public hearing for legal sports betting with key industry stakeholders. The leader of the discussion was Senator Joseph Addabbo, who chairs the Racing, Gaming and Wagering Committee. He is also among those leading the charge for legal mobile sports betting.
Addabbo is championing a bill along with Assemblyman Gary Pretlow to allow legal online sports betting. This bill would mean the commercial casinos paying a $12m license fee. The hearing also heard discussions on potential tax rates and integrity fees.
However, NY Governor Andrew Cuomo says that there would need to be a constitutional amendment for mobile sports betting to happen. If so, there will need to be a public referendum on the issue.
The bill’s sponsors are of the belief that the move is not unconstitutional, but allowable within the current legislation for legal sports betting. If the bill gathers momentum, it will face serious challenges in the House.
As the current legislative session in New York finishes at the end of June, it will be a tall order to get the bill pushed through in time.
Background to sports betting in New York
Since the ending of the federal ban in May 2018, New York’s lawmakers have sought to legalize sports betting. There have also been calls to legalize online poker. However, there are a number of major obstacles to these proposals.
New York’s four upstate commercial casinos will soon be opening sportsbooks, in a move backed by Cuomo. In his State of the State address on January 15, the governor said: “Let’s authorize sports betting in the upstate casinos. It’s here. It’s a reality, and it will generate activity in those casinos.”
No new bill had to be passed to make this happen. A 2013 bill had provision for the four casinos to open sportsbooks once the federal ban was overturned. The move was approved following a public referendum on the issue.
The four casinos have struggled with revenues and state officials hope these will be boosted by opening the sportsbooks. These casinos are the Resorts World Catskills, the Rivers Casino, Tioga Downs and the Del Lago Resort.
Many New Yorkers are crossing state lines to New Jersey to make sports bets, so New York officials hope that this move will stop people doing so in the future. The revenues would remain in-state and tax revenues would go towards the local government.
The four upstate casinos have performed worse than expected since the were licensed in 2015. None has hit its annual revenue target since opening. Location is a big issue, as they are somewhat out of the way and as a result, do not attract many visitors from out of town.
While sportsbooks generally have tight margins and will not generate a lot of direct revenue for the casino, they will benefit from increasing visitors who will likely play other games at the casinos. They might also stay at the on-site hotel or use their entertainment facilities.
The casinos will be able to have automatic sports betting machines to accept bets on their sites. The New York Gaming Commission made public its official rules for the sports betting sector on March 20.
There is a 60-day review period for the public to comment on any aspects of these rules. If there are no major issues, the commercial casinos will then be able to open their sportsbooks.
Why Cuomo is against mobile sports betting
Among the 10 states that now have legal sports betting, some have struggled to earn anywhere near their estimated revenues. This is largely due to them not allowing mobile sports betting.
New Jersey, however, has been the main success story to date. It is accepting hundreds of millions of dollars in sports bets each month, and over 80% come through mobile platforms. This is why some politicians want mobile sports betting to be legal in New York.
Cuomo, however, is against this idea. He does not believe that mobile revenues would be very significant in a state like New York. But he supports helping the struggling upstate casinos improve their bottom line by allowing retail sports betting.
He said: “We have sports betting that you can do through a casino and we are trying to support our casinos, which, you know, we did primarily upstate as an economic development vehicle. I’ve never been crazy about casinos, but life is options.
“Many upstate communities, we have a prison industry or nothing. So the casinos, especially the way we did it, they are high-paying jobs, they’re jobs with mobility, this would help fortify the upstate casinos.”