The state of New York has always been behind the times with regards to its legal sports betting scene. COVID-19 has only acted to expose and highlight just how unproductive the Empire State is in terms of its gambling industry, and just how dug in the leadership is when it comes to something that could dramatically assist them out of their budgetary black-hole.
The coronavirus crisis in New York has been dramatic, to say the least. With commercial casinos being closed, there was nowhere for New Yorkers to place a bet. Operator revenues became non-existent and the estimated tax-hit for the state is estimated to be around $600 million, according to the state budget office. It could all be at least mitigated somewhat by the adoption of a mobile betting platform, something that has kept the industry afloat in a few of New York’s neighbors.
But a reluctance to accept and launch mobile betting has been kept up by Governor Andrew Cuomo and the state has suffered because of it. Maybe a reported $14.5 billion overall budget shortfall will make him at least reconsider.
Holes in the Industry
A look at the New York scene reveals a couple of big holes in their legal sports betting industry. Of course, the COVID-factor, something that the state had zero control over, dealt a body-blow to the industry, mainly due to the fact that the state’s only casinos were shuttered for the better part of four months while the virus spread.
But a deeper dive into the location of New York’s brick-and-mortar facilities shows that factor may be just as much of an issue. Currently, New York’s legal gambling scene is limited to four facilities, which are located up-state and far away from the hustle and bustle of New York City. It is a chore and an all-day trip for New York City residents to travel to the rural, upstate facilities.
Having no mobile betting option for New Yorkers is also a huge hole in their industry. New York bettors are choosing to not bet at all, to utilize offshore books that have a mobile component, or they are utilizing neighbors’ mobile platforms to place their bets.
What New York Is Missing Out On
New York’s neighbor New Jersey continues to be the poster-state in terms of the new breed of legal sports betting states. It had consistently challenged and even eclipsed Nevada in terms of monthly handles. New Jersey in February, right before the COVID shutdowns took in $494 million in bets with $17 million in revenue. 88.2% or $436.49 million of that impressive monthly handle came via mobile means. New York, during February, saw a revenue loss of nearly $180 million.
As a result of the holes in the New York scene, New Jersey is benefitting from disenfranchised New York bettors. Some estimates say that 25% of sports betting revenues in New Jersey are thanks to bettors from New York. One figure that really stands out is New Jersey earning $33.81 in sports betting revenue per capita in 2019 with New York earning just $0.85 per capita.
The Garden State is closer to New York City than New York’s own gambling facilities, and New Jersey boasts a robust mobile platform.
The Effects of No Mobile
In New York, about 80% of the gaming tax revenue goes to education. The other 20% is sent to municipalities. The coronavirus crisis has ensured that less money will go to those education funds and municipalities are going to have to make due with a whole lot less as we end off 2020.
$1.5 billion per year is what studies have said that a mobile sports betting platform in New York could generate – every year. Until New York adopts, or even considers a mobile platform, they will continue to find themselves falling farther behind with limited options on how to dig themselves out of the hole.
Senator Joseph Addabbo recently commented that: “Health care, education, and other cuts could have been minimized,” in 2020. Maybe some budgetary desperation and some time to step back after the coronavirus tragedy will give lawmakers in New York some better clarity on how to maximize what is a tremendous legal sports betting potential.
What Is Being Done?
State Sen. James Skoufis has proposed bringing on to casino providers to operate out of New York City, a move that would be very attractive to the biggest operators in the country and a move that could generate $1 billion for the state. It would be the licenses alone that would generate the necessary funds for education and municipalities.
There have also been rumblings of some lawmakers pushing for a mobile component to New York’s legal sports betting industry. Unfortunately, that would require the blessing of the reluctant Governor and a change in the state’s constitution – two things that would likely take time away from the pressing issues of right now.
In the End
New York’s immense potential legal sports betting scene is being stymied by politics and an unwillingness to accept what is working for the industry across the country. New York doesn’t have to look far to see what a mobile betting platform has done for New Jersey and Pennsylvania.
While optimism for the legal sports betting industry remains somewhat present in New York for now, so too does the realization that it is falling farther behind every day. As long as the antiquated retail-only model remains, it is hard to see how legal sports betting helps the state they call home.