It's been a long time coming, but mobile sports betting is finally coming to the state of New York. All that's left to decide is which model to adopt and when exactly operations can commence.
Following the federal repeal of the Professional and Amateur Sports Protection Act of 1992 (PASPA) in 2018, sports betting has been rapidly spreading across the United States. Nearly half the country has passed some kind of betting legislation, with 14 states (plus Washington D.C.) allowing for mobile wagering on sports.
New York currently sits in that former group, but not the latter. Sports betting is legal in the state and accessible at a select number of upstate casinos, but is not widely available to the masses by way of mobile wagering.
As other states continue to benefit from massive success with the mobile platform, it's only logical that many both inside and outside the industry would wonder when New York gets in on the action. After all, it is widely thought that the Empire State has the potential to be one of the biggest markets in the country for sports betting, if not the biggest.
Finally, the New York questions are being answered. With both Governor Andrew Cuomo and the state legislature on board with mobile betting, 2021 looks to be the year things get rolling.
Cuomo, Legislators Getting On The Same Page
Previously, Governor Cuomo was staunchly opposed to NY sports betting and this fact was pretty well-known. The industry was categorized as an irresponsible source of revenue that would amount to a "rounding error" in the New York state budget. But that all changed following the impact of COVID-19.
The pandemic's contribution to New York's massive budget hole (the projected deficit through fiscal year 2024 is $63 billion) has forced the governor to consider new streams of revenue, which includes mobile sports betting. This means Cuomo must now work with lawmakers like Senator Joseph Addabbo (D-Queens) to figure out how to best launch online gaming in the state.
There has been no bigger online wagering advocate in New York than Addabbo, who is the author of Senate Bill S1183 and Chair of the Senate Racing, Gaming and Wagering Committee. He has spearheaded this effort from the very beginning alongside Assemblyman Gary Pretlow, and Governor Cuomo's change of heart on the issue is certainly welcome.
"The governor wants to do mobile sports betting and so do we," Addabbo told BonusSeeker. "We start with a common ground that we can work from, and build upon."
The initial plan Cuomo announced in January 2021 is vastly different from what state lawmakers have in mind, but the mutual understanding that New York must embrace mobile sports betting is a step in the right direction. While the main motivator is tax revenue, the industry can also help contribute financially to other areas of need in the Empire State.
"He [Cuomo] mentioned that COVID has presented us with an opportunity, and he's right. It is an opportunity for revenue, and job growth in my opinion, and educational funding."
The question is no longer an 'if' but a 'when' and a 'how' the state goes about regulating the mobile betting space. And if this is going to be the rousing success that we've seen in other states, the model that is decided upon is likely to play a huge role.
Choosing A New York Online Sports Betting Model
The model in which New York chooses is significant because it could set up long-term success of the industry's operation in the state. With the Governor and the state legislature at odds about how to proceed, this is the key issue to hash out in time for the start of the new fiscal year on April 1.
Despite the very major differences between the two plans, Addabbo remains optimistic about progress being made in the near term.
"I'm hopeful we can work with the governor's office and figure out a model that's more similar to the one the state legislature is proposing but we'll hopefully negotiate something over the next six weeks or so," Addabbo said.
Under Bill S1183, Addabbo and his colleagues are in favor of a competitive model matching that of most mobile betting states. The bill proposes each of the seven licensed casinos in the state get two skins, maxing out the number of potential sportsbooks at 14. The state would collect money via tax revenue and licensing fees, which are slated to be $12 million for each operator.
Currently, Cuomo doesn't share Addabbo's vision for an open market that is run through the casinos. The governor's plan involves a request for proposals (RFP) issued by the New York Gaming Commission to select and license a betting platform in a closed-market setting that is run through the state lottery.
In Cuomo's view, doling out sports betting rights to the highest bidder with a state-run model can make much more revenue than an open market. It remains to be seen, however, just how accurate the projections made by the governor's office are.
While Cuomo has left open the option of multiple operators being chosen, there's also the possibility of a de facto monopoly on sports betting that could leave bettors out in the cold with choices.
"You want a more inclusive, expansive, and competitive model than one that is restrictive," Addabbo pointed out. "If you can't handle the volume of this growth market, then you've got a bad product. And I don't think restricting sportsbook providers and doing an RFP does it."
The Proof Is In New Jersey
It's not difficult to understand why state legislators, the gaming industry, and the public all side with an open model. All you need to do is look next door. New Jersey, which launched mobile wagering in 2018 shortly after the PASPA repeal, has seen an economic boom and become the blueprint for how to establish sports betting.
We should note that an industry study found that about 20 percent of New Jersey's sports betting revenue comes from New York residents. The goal for both state lawmakers and the governor is to keep that money in-house after missing out for so long.
In its first full year with mobile betting (2019), the Garden State received nearly $300 in tax revenue, with about $36 million of that going directly to tax coffers. In 2020, revenue jumped to nearly $360 million despite all major sports being on hiatus for several months.
The competitive model is making New Jersey money while providing its consumers a top-of-the-line product with a variety of sportsbooks to choose from. To Addabbo, the results speak for themselves.
"It's a win-win. That is why [New] Jersey prefers that model and Pennsylvania prefers that model and the vast majority of other states that do mobile sports betting prefer that model. Because it's a proven product. It's a proven winner for the state and for its people."
On the other hand, the state-sponsor model is not seeing nearly as much success in the states where it operates (New Hampshire, Oregon, Rhode Island, and Washington D.C.) In fact, Oregon Governor Kate Brown has backed a bill that would alter her state's betting landscape to an open model that paves the way for competition.
Addabbo's point of view is that if the lottery-based model isn't helping grow the industry for smaller markets, it isn't what's best for New York.
"It's almost built for failure. That's my concern," Addabbo claims. "We think that New York deserves a more premier model. One that can sustain future growth and benefit the state in both the short term and long term."
The issues that come with single-operator markets stem from a lack of options and they include the absence of welcome bonuses for new players and unfavorable betting lines.
These are things that many bettors aren't willing to sacrifice and It could lead to some opting to continue using other outlets to wager, whether it be driving into New Jersey or using illegal offshore sites.
Either option defeats the purpose of legalizing mobile betting and as a result, the revenue share may not be as high as the governor's office projects. With a casino-based competitive model, bettors would have no reason to take their business elsewhere. The amenities would match those in any other state, and there would be a variety of options.
When Will NY Sports Betting Start?
With much to be decided between now and April 1, the best we can do at the moment is speculate on the start date for mobile sports betting in New York. That said, Addabbo does maintain the belief that mobile wagering can get going in time for the National Football League season in early September, so long as it's in the budget at the start of the fiscal year.
If we are using the blueprints laid out by other states and our understanding of the industry to make an educated guess, the beginning of the NFL schedule makes perfect sense. Football season is the busiest part of the year for sportsbooks and the time where the most revenue can be made.
Kicking things off by early September could ensure a lucrative start to mobile sports betting. All we need to do now is hope negotiations result in the institution of a model that is best for New York.
Photo Credit: Associated Press