New York Sports Betting: State Reaches Tentative Deal

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After eight years of state and federal political maneuvering, a tentative agreement on mobile sports betting has been reached in New York.  

The possible deal between state lawmakers and Gov. Andrew Cuomo would reportedly stick close to a lottery-run model proposed by the governor in early 2021. 

Other states with a lottery-run mobile sports betting model include New Hampshire and Oregon. Both states launched their mobile sportsbooks in late 2019.  

The tentative New York plan is expected to work like this: 

  • One operator (possibly two) would run mobile sports betting for the State of New York. It is unknown at this point who those operators would be — Cuomo mentioned FanDuel and DraftKings yesterday in a Q&A with reporters. 
  • The tax rate would be higher than the 12% rate proposed by state lawmakers under a casino-based model. A tax rate “considerably higher” than that low double-digit rate is expected. 
  • The minimum number of mobile sportsbooks — or skins — would total four with no cap. That could allow for future growth. 
  • State tax revenue from the lottery plan would reach $500 million a year, according to Cuomo’s estimates. 

How New York Got Here

It took a long time to get to this point. New York legalized sports wagering way back in 2013, but only at upstate commercial and tribal casinos. It took a federal case (literally) and six more years before retail sportsbooks at upstate casinos launched in 2019. 

New York mobile sports betting legalization remained a long shot until just three short months ago. The only expectation before the start of 2021 was that Gov. Andrew Cuomo would continue his opposition to mobile sportsbooks in New York. 

Then came Jan. 6, 2021, when the governor announced support for mobile sportsbooks through a lottery system. At that time, the state needed revenue to plug a $15-billion hole in the New York state budget. Lawmakers urged a casino-based plan, which Cuomo rejected. 

The Revenue Angle

The legalization of New York mobile sports betting was never about big state tax revenue. New York State Assemblyman Gary Pretlow told Gaming Today that tax revenue from sports betting is only a fraction of one percent of the total state’s budget. 

What legal mobile sports betting will do for New York is allow it to be economically competitive with neighboring states that, right now, get 75 to 95 percent of their sports betting handle from mobile sports betting, and 20 percent or more of their mobile sports betting handle from New Yorkers. 

That said, being in the mobile sportsbook game will let New York retain some tax dollars now going across state lines. That will allow it to keep more of the money going to New Jersey, which raked in $9.6 million in tax dollars from online sportsbooks alone last January.  

Pennsylvania did even better, with $10.1 million in net tax revenue collected from mobile sports betting. 

A Fluid Situation

Cuomo has repeatedly said that New York mobile sports betting tax revenue could reach half a billion dollars. But Cuomo’s estimate is just that — an estimate. Returns under a limited operator model could be disappointing. 

The reason? New York is smack dab in the middle of the most competitive mobile sportsbook market in the US. Setting a minimum on skins (even with no maximum) via a lottery model could restrict such a hot market.

Deutsche Bank said just last week that the New York mobile sports betting plan as proposed “would hamper the ability of most operators to participate and harness the returns of those that do.”  

That, in turn, could push downstate or northern New Yorkers looking for the best signup bonuses and free bet promos across state lines. 

Likely Skins, Possible Launch

Initial skins after New York mobile sports betting legalization will likely include at least one or two retail sportsbook partners already in the state. Those include the following:  

  • DraftKings Sportsbook (Partner: del Lago Resort in Waterloo, NY) 
  • Kambi (Partner: Seneca Niagara Resort and Casino, Niagara Falls, NY; Seneca Buffalo Creek Casino, Buffalo, NY; Seneca Allegany Resort and Casino, Salamanca, NY) 
  • BetRivers (Partner: Rivers Casino and Resort, Schenectady, NY) 
  • FanDuel Sportsbooks (Partner: Tioga Downs and Casino, Nichols, NY) 
  • Caesars/William Hill (Partner: Turning Stone Resort Casino, Verona, NY) 
  • FOX Bet (Partner: Saint Regis Mohawk Tribe)
  • Bet365 Sportsbook (Partner: Resorts World Catskills, Monticello, NY) 
  • BetMGM Sportsbook (Owner of Yonkers Raceway and Empire City Casino)

A mobile launch could take weeks, or longer. The timetable depends on the state bidding process, and regulatory action by the New York State Gaming Commission. 

Then there’s finalization of the mobile sports betting deal itself. That will come with passage of the now-overdue New York state budget, which is expected any day now.

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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