It has been quite a ride for the legal sports betting industry in the state of New York. Years of denial about expansion of what has been a bare-bones platform seems to finally be coming to an end. The last month has seen the sports betting industry gain a little expansion momentum, first from the previously reluctant Governor Andrew Cuomo and as of Wednesday, the equally leery Senate.
Wednesday signaled a new chapter in the progression of legal sports betting in New York thanks to two bills that would legalize mobile sports betting in the state. Those bills were approved in the New York State Legislature and have been moved on to its finance committee. The legislation happened to coincide with Governor Andrew Cuomo’s budget which mentioned the need for mobile sports betting for the state.
“Mobile sports betting we think could raise $500 million dollars. Many states have done it. Here the question is not really whether or not we do mobile sports betting, the question is more how?” Cuomo said.”
An estimated $139.8 million to $174.8 million in annual tax revenue is expected to be generated for tapped-out state and local coffers in New York, making the plan for legal mobile sports betting very attractive for all involved.
A Little History of the New York Legal Sports Betting Scene
New York has fallen behind in terms of legal sports betting and has missed out on millions in revenues and tax contributions from a platform that is being utilized by its own citizens, on the Black Market and just across the river in neighboring New Jersey.
New York currently runs just four retail-only casinos located upstate – far away from the major population centers that would make it more viable. To this day there is no mobile betting in New York, a state that borders New Jersey which reported $929.3 million or 93.3% of and incredible $996,300,794 December handle coming from mobile apps. An estimated 25% of sports betting revenues in New Jersey are thanks to bettors from New York.
New Jersey reported over $6 billion in wagers in 2020 – $5.53 billion or about 92% of which was wagered online. The Garden State has reported $11 billion in bets since 2018 which has contributed nearly $100 million in tax revenue for New Jersey. New York, with a bigger sports base could reasonably expect to approach or pass those numbers if they could just evolve their way of thinking about the subject of legal sports betting on the whole. That appears to finally be happening.
What the Assembly and Senate Bills Call For
Senate Bill 1183 and Assembly Bill 1257 call on the state to approve 14 internet and mobile sports betting platforms that would be available to all bettors state-wide. Those 14 licenses would be awarded to all four of the upstate casinos plus three tribal casinos – all of which would receive two licences right off the bat.
“This bill includes two skins, rather than one skin,” Assemblyman J. Gary Pretlow said during a recent hearing. “This bill actually creates jobs, which the governors won’t do. I’ve heard from all the casinos and everyone is on board.”
Each online sportsbook operator would have to pay a one-time $12 million fee. That could equal $168 million in state revenue before anyone takes a bet if all 14 licenses are used. The upfront cash could help sway legislators to a yes vote.
The tax rate would be set at 12% for internet and mobile sportsbooks and 8.5% for retail outlets. New York’s rash of professional sports venues will be allowed the opportunities to provide betting terminals on-site, as long as those kiosks are affiliated with a participating brick-and-mortar facility in the state.
Registration for mobile betting platforms will be able to be done remotely, not with an antiquated in-person requirement that has dragged states like Nevada down especially during this time of COVID reality.
With a fairly comprehensive legislative plan, with Governor Cuomo and both legislative houses seemingly in lockstep regarding legal sports betting for New York, optimism of something getting done for The Empire State this year is as high as it ever has been.
But hurdles remain – the biggest being Cuomo’s desire to see the New York State Lottery regulating the mobile sports betting platform. The District of Columbia and Oregon are two jurisdictions with a similar structure to what Cuomo is proposing – neither has been a resounding success.
It is expected that all will be worked out by June, when the current legislative session ends in New York. By then, New York bettors will know if their lawmakers are willing to join the legal sports betting goldrush or if they are destined to keep their platform stuck in the bureaucratic mud.