Guessing Upon Gov. Cuomo’s Next Step Legislating Online Sports Wagering for New York
- Gov. Cuomo shocked all announcing intention of legalizing NY online wagering
- Preference for a NY State Lottery-run & sole-source operator model met with opposition
- Many legislative questions include if a 2022 voter referendum would be necessary
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As certain as forecasting the Jet’s first round draft choice or perhaps who will play in this year’s Super Bowl, can anyone say with surety that New York state bettors will enjoy legalized online sports wagering in 2021? That is for those who do not want to continue driving into New Jersey or Pennsylvania to log-in.
The bright spot for bettors is Governor Andrew Cuomo is finally willing to entertain a plan to discuss bringing online sports wagering into the state. The controversial governor, who has long railed against legalizing online sports betting, will make the revenue-generating measure a central part of his policy proposals to be laid out in next week’s State of the State address.
Motivation is primarily due to witnessing neighboring New Jersey deliver monthly if not weekly headlines announcing record sports wagering success, all dominated by figures that encompass online betting taking 85-90% of the action. Numbers that have been driven by the impacts of COVID-19 and the iGaming convenience that sports bettors have come to expect through illegal online offshore gambling sources for over two decades.
Cuomo finds Motivation Through Frustration
Perhaps it is not surprising that the governor has experienced an about-face regarding his position involving online wagering. The pandemic has destroyed New York’s tax funding while legislators seek creative new ways to supplement a multibillion-dollar budget hole. Meanwhile, Cuomo has been consistently reluctant toward raising taxes impatiently waiting for federal help for his state.
While evaluating both legalizing marijuana and introducing online sports wagering, the preference has become evident lately. In November, New Jersey led the US with a record $931.6 million handles for sports wagering and a revenue take of $50.6 million. Of that, an important $6.2 million was contributed toward state taxes.
Recent surveys have indicated that approximately 20% of New Jersey’s sports wagering revenue is contributed by New York residents. Many bettors drive over to the Empire State, crossing over geolocation fences that ensure all online wagering will only occur within the state.
Governor Cuomo painfully acknowledged this reality by saying:
At a time when New York faces a historic budget deficit due to the COVID-19 pandemic, the current online sports wagering structure incentivizes a large segment of New York residents to travel out of state to make online sports wagers or continue to patronize. New York has the potential to be the largest sports wagering market in the United States, and by legalizing sports betting we aim to keep millions of dollars in revenue here at home, which will only strengthen our ability to rebuild from the COVID-19 crisis.
Who Runs the Show?
A confusion remains involving legislation of who will be anointed and potentially licensed to operate online gaming for New York.
According to a report published Wednesday in the New York Daily News, Cuomo will include a sole-source model for online wagering in his 2021 policy, giving the New York State Lottery power to operate it. A method that has incited much predictable opposition from gaming industry forces and more crucially, a move that could also require a constitutional amendment for approval.
Then following Governor Cuomo’s press conference, a statement said sports betting would run through the New York State Gaming Commission, not the New York Lottery. The commission would then select and thereby license a sports wagering operator.
Currently, four upstate casinos operate sportsbooks in New York without approval for any of the state’s horse racing facilities, known as “racinos”. As the statement is written it would only allow for one mobile operator and a select group of operators including DraftKings Sportsbook, FanDuel, BetRivers, and IGT to vie for that specific license.
It seems quite different than what any other US state has composed thus far. A meeting scheduled next week hopes to clear up the logistics of the plan and to see if any changes would be potentially put forth.
The Political Battle
All political sides are in full agreement they want online wagering legalized in New York. The key question is “how” they go about it. Governor Cuomo’s sole-source model is certainly not the most popular plan of attack.
New York State Sen. Joe Addabbo and Assemblyman J. Gary Pretlow has attempted numerous times to win legislation for online sports wagering. They both sternly support a multi-operator model, extending access beyond the existing four New York commercial casinos and to allow for the competitive opportunity.
Also, New York includes Native American operated casinos that currently have onsite casinos. There are horse tracks (racinos) that would undoubtedly also be opposed to a sole-source model that restricts them.
The most distressing situation involves the necessity for a potential amendment involving a vote. The next New York election ballot opportunity to potentially approve online wagering does not come until November 2022, making some time in 2023 the earliest chance for the state to launch operation. A winning wager for both New Jersey and Pennsylvania.
While it is certainly encouraging to see Governor Cuomo finally move forward to legalize online wagering and sports betting for New York, we call upon him to first consult the most important and knowledgeable group possible. His customers. The smart, experienced sports bettors of New York state.
They will tell you it is important to have multiple sources to wager upon a game to help enable their fair opportunity to win. Like their nearby neighbors in New Jersey & Pennsylvania, they demand every competitive opportunity possible. They do not favor sole-sourcing state lottery models that have proved unpopular such as Oregon and in Washington DC.
From a behavioral standpoint, sports bettors are not “lottery-type” thinkers. Their dreams encompass the next few hours or a day of action. Not the fortunes of a scratch-off lottery ticket or a chance of a lifetime.
Although a lottery-run operation provides more tax dollars for the state, the sports bettor understands they will inevitably pay for it, keeping them potentially within reach of their existing “illegal” sportsbook option.
Here’s hoping we can soon stop guessing how and when Governor Cuomo can get New York sports wagering online. The best bet is as fast as possible for everyone within the state in need.
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Larry Gibbs is both a seasoned journalist and a respected online gaming industry consultant. His wry commentary & sharp analysis have appeared in numerous top gaming and sports wagering publications. He has also served as Vice President of US Gaming Services, a marketing research organization with 15 years of experience in US online wagering. He has spoken at noted gaming industry conferences including G2E, GiGSE, and NCLGS.
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