The US legal sports betting industry could be getting an unforeseen boost in December as the word is surfacing about the chance of New York finally seriously considering adopting a mobile sports betting platform. Up until now, the state, for a variety of head-scratching reasons, has opted to stick with a retail-only platform. It ran out of four upstate casinos, far from the major urban centers that would make it more viable.
However, news out of the offices of State Sen. Joseph Addabbo and Assemblyman J. Gary Pretlow (two of the biggest mobile betting advocates in the state) reignited the chances of mobile betting coming to New York, as early as the end of this year. Assembly Speaker Carl Heastie will apparently open up mobile betting discussions this month as part of a revenue bill that will include an enormous revenue shortfall, largely due to the coronavirus crisis.
“We are looking at huge revenue shortages for the state, the same as other states are enduring, so sports betting will add something to what we are trying to do especially toward revenue back to our educational system,” Pretlow said on a panel during the first day of the Betting on Sports America virtual conference. “We do have to do a revenue bill, between now and the end of the year, and I’ve been told by the Speaker of the Assembly that sports betting will be part of that revenue bill.”
Catalyst for the Discussion
Legislators in New York are about to embark in discussions surrounding a budget revenue bill for the next fiscal year. With COVID-19 decimating state and local coffers, those same legislators are going to have to get creative with ways to generate more tax revenues going forward. Legal online sports betting taxation is a proven way to generate such funds.
“My colleagues know that we need the money and there will be revenue deficiencies next year compared to this year, so I don’t think it’s a hard sell for the cause of tens of millions of additional revenues,” Assemblyman J. Gary Pretlow said during an industry conference Tuesday. “They can’t thumb their nose at it.”
New York faces an estimated $17 billion budget shortfall. Gov. Andrew Cuomo has already announced $10 billion in spending cuts because of the COVID-19 situation – some think that a 20% cut in educational funding is in the cards.
“This could go some way, I wouldn’t even say a long way, but it could go some way back to our education system and providing funding for our young people,” Pretlow said.
Benefits and Headwinds
Bill 17D, which was proposed just a few months ago would immediately, create $84 million in licensing fees and could be responsible for a projected $108 million per year flowing into COVID-drained New York state coffers. Pretty hard to ignore.
But the figure being released are being ignored. Governor Cuomo, an ardent opponent of mobile sports betting’s benefits has so far refused to support any sort of mobile platform, despite his neighbors benefitting from what it brings to their states. Cuomo has ultimate veto-power over any sort of mobile betting legislation going forward.
Then there is the time-crunch. The end of December is closer than most think. With the holidays coming up, there isn’t a whole lot of time to get something hammered out.
The Proof Is in Their Neighbors
New York state lawmakers don’t have to look far to see the benefits of a strong mobile platform. New Jersey and Pennsylvania’s sports betting scenes have been going berserk the last few months. The two combined for a $1.3 billion total sports betting handle in October alone.
A closer look at how the dollars are being generated in those states reveals the bulk of their handles coming from mobile apps. Both states reported just over 90% of their record-October handles coming from online betting.
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.
“I’ve always been a big believer in common sense,” Jeffrey Gural owner of the Meadowlands Racetrack in East Rutherford, New Jersey said. “Three hundred million was handled at The Meadowlands recently and $100 million of it came from New Yorkers who made the trip over or crossed the border to bet online here.”
New York has the iconic teams and the huge population base (20 million) to outdo the numbers of their neighbors – all that is needed is a desire by lawmakers to adopt and support a mobile betting platform for the state.
Just Another Kick at the Can
The state of New York has been here before – optimism for a mobile sports betting platform has come and gone with ultimately no resolution. But the need for some revenue generators for state and local coffers has never been greater.
As it stands now, New York’s brick-and-mortar facilities have been forced to run at a limited capacity and are again in danger of shutting down due to COVID-19. That puts the state in danger of garnering exactly zero tax revenue from its legal sport betting platform.
Billions of dollars in yearly sports handle and hundreds of millions of dollars in tax revenue for the state are on the line. “We’ve pushed really hard for mobile sports betting to be enacted in New York State,” Addabbo said. “We’re still optimistic we can get it done.”