New York Mobile Sports Betting Rides Out Cuomo Chaos

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Attempting to legalize online and mobile sports betting in New York state in recent years has been a lot like whack-a-mole. It’s hard to make any progress. 

Perhaps the biggest obstacle has been Governor Andrew Cuomo, who has differed with state lawmakers on proposed online sports betting legislation. That’s left some folks wondering if 2021 will be any different.

It’s possible. The governor in January indicated his approval for online and mobile sports betting as his state grapples with personal and costly financial pandemic losses. Some estimates show New York’s state budget deficit reaching $60 billion in four years without federal aid and new revenue streams, like online sports betting.

Another difference this year is Cuomo himself. Scandal over the governor’s handling of data relating to state nursing-home COVID deaths, followed by allegations of sexual harassment, have hurt his public standing. Some lawmakers have even called for his resignation.

All this leaves little doubt that Cuomo needs a political win. And that could give online and mobile sports betting proponents some leverage, if they work fast.   

Time Frame For Passage

There’s not much time left to negotiate before the new state fiscal year starts April 1 if New York state wants to collect online sports betting revenue sooner rather than later. The good news is a lot of the legwork is done, with two (nearly identical) proposals prepped for floor votes in the state Assembly and state Senate right now. 

The proposals would legalize online and mobile sports wagering and establish a tax on gross mobile sports wagering revenue that could bring upwards of $79 million to $100 million or more in new revenue into New York state annually. That’s more than the $49.4 million in state revenue from online sports betting collected last year in New Jersey, now the top sports-betting market in the country. 

New York state’s initial take could run into billions of dollars when upfront licensing fees are added. 

Lottery-Based Vs. A Casino-Based Mobile Sports Betting

But Cuomo has said he thinks New York can do better than that. He has advocated a state lottery-run online sports betting model instead of the casino-based model pending in the legislature as the way to go.

Cuomo has also stood by state figures estimating New York state could reap $500 million a year in tax revenue under a lottery-based model.

Not everyone agrees. Some say a lottery model would be more restrictive than allowing upstate casinos to work through online sports betting platforms onsite and via affiliates (including New York-licensed racetracks, OTB sites, tribal casinos, and pro-sports venues) under current legislative proposals. 

Another consideration is the success of surrounding states that use the casino-based approach. One of those states is New Jersey. Another is Pennsylvania. Both states rank among the top six online sports betting states in the country. 

New Yorkers seem to like the casino-based model; FanDuel’s CEO said last year that over 20 percent of those using its platform in New Jersey are mobile sports bettors from New York.

Timing Is Everything

At least one state legislator is optimistic about the chances for online and mobile sports legislation to be finalized in the weeks ahead. 

Sen. Joseph Addabbo Jr., a high-ranking lawmaker sponsoring the online and mobile sports betting bill pending in the Senate, said just last week he’s hopeful New York state could have online and mobile sports wagering by football season this fall.

The optimism is apparently contagious — some upstate casinos are reportedly so hyped about the legislation’s chances that they are at work lining up mobile betting vendors. And why not? The casinos now have limited sports betting options. Online and mobile sports betting would help their business exponentially. 

What’s Next?

Overall, the casino-based approach looks like the state’s first and best chance to legalize online and mobile sports betting for implementation in FY 2022. Both proposals pending legislative action this month have bipartisan support and a shot at passage before the new state budget is finalized.

The alternative is to wait until after the start of FY 2022 and take up the issue again, either before the end of the current legislation session in June or later. That would delay legislative approval for new revenue from an online sports betting platform at a time when New York state is facing a $16 billion budget shortfall.

It’s up to the state’s beleaguered governor – and any holdout state lawmakers – to decide if that’s a good strategy.

About the Author

Rebecca Hanchett

Rebecca Hanchett is a political writer based in Kentucky's Bluegrass region and covers legislative developments at Gaming Today. She worked as a public affairs specialist for 23 years at the Kentucky State Capitol. A University of Kentucky grad, she has been known to watch UK basketball from time to time.

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