Last week, I wrote about the possibility of New Jersey pulling in a billion dollars in sports betting handle in one month thanks to their gambling initiatives. A huge portion of that money comes from mobile wagering, which makes sense as we are currently in a pandemic and because of the convenience factor of betting from your smartphone.
As a whole, the sports betting industry is taking off across the country. A prime example of that was on Election Day, where three more states moved forward with gambling. But there is one state that seems to be just treading water — New York.
Currently, the Empire State has legal sports betting, although it’s not online yet. Just under a dozen upstate casinos can operate brick-and-mortar sportsbooks, as sports betting is permitted only at upstate commercial casinos and tribal gaming properties. The state’s residents aren’t afforded the same opportunities despite the initial expectation that it would be one of the first states to go all-in.
New York Gov. Andrew Cuomo has opposed statewide mobile sports betting, calling it unconstitutional. However, there is a group leading the charge to push online gaming through being led by New York State Sen. Joseph Addabbo Jr. (D-Queens). The Senator is also the chairman of the Racing, Gaming, and Wagering Committee, and has been advocating the cause since 2019. His Bill 17D failed to get adequate support in the prior legislative session.
When speaking with the Senator, he admits that in all likelihood it will be early next year for the session to reconvene due to the pandemic. But he is upbeat about his proposal and says his fellow senators and assembly members now have more interest because it can generate revenue to fund worthy state programs.
COVID-19’s ripple effects have been decimating for the state. Currently there is a $20 billion hole in the New York State budget and lawmakers are scrambling to make up the gaping difference between what is necessary and what is obtainable. Addabbo says the additional revenue would ward off “deep cuts” to such expenses as healthcare and education. Per the Governor, the State is $50 billion in debt between local and state governments.
“The deficit and debt would be offset by the revenue brought in via mobile betting,” Addabbo said. “It’s a no brainer.”
“The deficit and debt would be offset by the revenue brought in via mobile betting,” Addabbo said. “It’s a no brainer.”NY state Senator Joseph Addabbo laments at Sports Betting USA event that 25 pct of NJ’s revenues come from NYers #SBUSA pic.twitter.com/cqMW6IdpTX
— John Brennan (@BergenBrennan) November 5, 2019
The Senator also points out that Resorts World Casino New York City, located in Queens, employs over 1,000 workers. Resorts World New York City alone has generated over $3 billion in state educational funding.
“New York is losing revenue,” said Addabbo. “(We’re) losing educational funding because a portion of our gaming wages go toward educational funding. And also, the addiction problem. Right now, if you want to help someone who has a gaming addiction you can’t help them because you don’t know who they are.”
Another lack of mobile betting consequence is the revenue from New York going to neighboring states. Especially New Jersey. Because it is by geolocation, bettors can simply travel across the state border, place their wagers and travel back. Given legal, out-of-state sports betting options in Pennsylvania and New Jersey, New York is missing out on $1 billion a year, Addabbo said.
The Senator also points out that mobile betting would be safer for New York’s residents. Especially with the current travel ban due to the pandemic.
“Twenty-five percent of mobile betting in New Jersey is from New Yorkers,” he said.
Addabbo also wants to see the three unassigned downstate gaming licenses issued sooner than 2023 when they are scheduled to be assigned.
Paul Hannon, Vice President of Strategy and Retail for PointsBet, supports Addabbo and others who are trying to move the bill ahead.
“We greatly appreciate Senator Addabbo’s tireless work to date carrying the flag on mobile sports wagering in New York state, as well his counterpart in the Assembly, Gary Pretlow,” Hannon said. “Without them we wouldn’t be anywhere close to where we are today with a chance to see online sports wagering become a reality.”
While the push for online sports betting is moving forward, there are still details to work out. Once mobile is approved, the biggest question surrounds how many skins there will be. To keep it simple, single skin basically means that each casino can only partner with one online sportsbook. That would limit New York’s action to one skin for the four upstate casinos and three tribal operators.
While Hannon is all for mobile, he points out that a single skin model has some flaws to it.
“S17-D, as it pertains to the issue of the number of skins per license, will not afford the state or its consumers the opportunity to maximize the potential of online sports wagering,” he said. “On a per capita basis, this single-skin bill benefits only the land-based casino special interests and those associated, and would effectively create the least competitive, least consumer friendly commercial online sports wagering market in the U.S.
“New York can very likely shape the entire future of legalized sports wagering in the U.S., and in instituting a single-skin model, can prematurely decide the winners and losers of the sports betting industry just 2 1/2 years after PASPA’s being overturned.”
Hannon admittingly has a vested interest. If New York went forward with a single skin model, his company PointsBet would be left sitting this one out. As would another big player in the gambling space, Penn National. Nonetheless, he does bring up a big valid point, the money being left on the table.
“Each mobile skin permitted in New York state equates to an additional $12 million in upfront license fees right away, and at that rate, they will sell easily,” he said. “When multiplied by 10 casino operators, assuming downstate casinos are part of any gaming expansion, that means one skin per license equals $120 million in fees paid, two equals $240 million, three equals $360 million.
“When looked at through this lens, online sports wagering in New York is no longer a rounding error with a COVID-sized reported budget deficit of $59 billion to dig out of.”
Addabbo pointed out that single skin is a “starting point” for mobile betting and that it’ll evolve. In the grand scheme of things, New York has a chance to blow away the competition if mobile gambling gets approved. Many believe that the Empire State could easily do a billion in handle in a month if all systems were go, So this will be something to keep an eye on come 2021.