Posted on: January 6, 2021, 05:26h.
Last updated on: January 6, 2021, 05:26h.
New York Gov. Andrew Cuomo has had a change of heart about mobile sports betting, but he’s not looking to follow New Jersey’s lead.
Asked about a New York Daily News report from earlier in the day Cuomo, who had previously stated online sports betting needed a constitutional amendment, told reporters during his Wednesday COVID briefing that he wants to run sports betting in the same way the state runs the lottery.
Many states have done sports betting, but they basically allow casinos to run their own gambling operations,” he said. “That makes a lot of money for casinos, but it makes minimal money for the state. And I’m not here to make casinos a lot of money. I’m here to raise funds for the state.”
The state currently allows brick-and-mortar sportsbooks at its four commercially licensed upstate casinos and at tribal casinos. No New York sportsbooks are located near New York City.
Because of the COVID-19 pandemic, Cuomo claims the state needs about $15 billion a year to cover its next two budget cycles. That figure doesn’t include billions city and county governments need, as well as public agencies like the Metropolitan Transportation Authority. The governor has called on the federal government to fill those deficits because he blames the Trump Administration for failing to keep the virus from ravaging New York City and other parts of the state during the early stages of the emergency.
As it appeared that Congress would not oblige, Cuomo and state officials began exploring other ways to meet that deficit. That included a combination of tax increases, budget cuts, layoffs, and new revenue streams.
Even as it appears now that a soon-to-be Democratic-led Congress will be able to provide aid to New York and other states, Cuomo said the state will still try to do its part by raising revenue.
New York Would Be King of the Sports Betting Hill
With a state population of nearly 20 million, New York would easily become the top sports betting state in the country. Monthly handles exceeding $1 billion would not be surprising given how sports betting has taken off since the US Supreme Court overturned PASPA nearly three years ago.
Currently, that honor goes to neighboring New Jersey, which just reported a record-breaking handle of $931.6 million in November. Analysts estimate about 25 percent of those bets come from New York residents who cross the Hudson River to wager.
However, to Cuomo’s point, New Jersey received just $6.2 million in taxes off the $50.6 million in revenue the sportsbooks received in November. For the first 11 months of 2020, sportsbooks have won $332.1 million, and the state has received about $41.8 million.
State Budget Director Robert Mujica said New York wants a bigger share.
The way the governor’s proposing it and will advance it is so that the state can get up to $500 million a year instead of $50 (million),” he said. “And that money would then go to the state budget, otherwise for the bettors, it’s seamless and it’s exactly the same. The only differences state gets the money versus others.”
Bettors, though, might notice a difference if the state’s online sports betting app offers worse odds than apps in New Jersey or other neighboring states in order to provide revenue to New York.
Looking to New Hampshire?
At first glance, it appears Cuomo’s proposal most closely resembles how New Hampshire pursued sports betting. The state’s lottery went through an RFP process and ultimately chose to do an exclusive deal with DraftKings for both online and retail as the Boston-based company offered to split revenues with the state.
Last week, New Hampshire Gov. Chris Sununu reported that more than $300 million was bet in the Granite State and the state received more than $10 million to fund education programs.
Under the plan detailed in a release by the Cuomo administration, the New York Gaming Commission would issue a request for proposals for a sports betting operator or platform. The state would then issue a license to offer mobile wagering.
The details aren’t exactly clear whether New York would award multiple licenses. In addition, the release states the operator or platform “must have a partnership” with an existing licensed commercial casino.
If that language refers to only the four upstate casinos – Del Lago Resort and Casino (DraftKings), Resorts World Catskills (IGT), Rivers Casino and Resort (BetRivers), and Tioga Downs and Casino (FanDuel) – that could exclude operators like MGM Resorts International, which operates the sportsbook-free Empire City Casino at Yonkers Raceway.
BetMGM, the sportsbook MGM operates with GVC Holdings, is interested in getting a chance in New York, according to a statement from CEO Adam Greenblatt.
“Legalizing sports betting has the potential to bring leaking tax dollars back to New York from offshore books and nearby states,” he said. “We’re eagerly awaiting next steps and have every intention of working closely with regulators in New York to bring BetMGM’s leading digital offering to the state.”
No Movement on Downstate Casinos
For years, as state lawmakers like state Sen. Joseph Addabbo, D-Queens, have pursued legislation that would allow online sports betting, only for Cuomo to push back, saying such a move would require a constitutional amendment.
Last month, Cuomo showed signs of changing his position as he casually mentioned it as a revenue-generating possibility during a COVID briefing.
While it appears the governor has changed his mind on sports betting, he’s still toeing the line on not allowing new casinos to open in New York City anytime soon. The state allowed the four upstate licensed casino resorts to open for seven years before the downstate licenses would be awarded in 2023.
“I haven’t given it any consideration,” Cuomo said.
Some, including New York Yankees President Randy Levine, have called on issuing the licenses earlier to help New York City and its recovery from COVID. Mayor Bill de Blasio has stated the city faces a $9 billion deficit itself.