New York Lawmakers, Stakeholders Desperate For Online Sports Betting

The longer New York goes without legal online sports betting, the more willing lawmakers and stakeholders are to negotiate. That was crystal clear Tuesday when Jeff Gural, a managing partner at New Jersey’s Meadowlands Racetrack and owner of New York’s Tioga Downs, uttered these words: “Casinos would go along with whatever the state wants to do. This is an emergency.”

That came in response to a question about whether or not casino stakeholders in New York would be amenable to allowing two “skins,” or online digital sportsbook brands, for each of their casinos. In New Jersey, which allows up to three skins per licensed physical property, the Meadowlands partners for online wagering with both FanDuel and PointsBet.

Prior to Tuesday, the stance was that casino owners in New York wanted to allow only a single skin. Gural offered his take during a Betting on Sports America digital conference panel about the road to legalization in New York. And it is significant, as lawmakers and stakeholders work to avoid further roadblocks to legal statewide mobile sports wagering.

Sports wagering is currently legal in New York, but only at physical sportsbook locations at four upstate casinos, including Tioga Downs. They first opened in June 2019 under a 2013 law that allowed for it at del Lago Resort and Casino in Seneca County, Tioga Downs in Tioga County, Resorts World Catskills in Sullivan County, and Rivers in Schenectady County, should the federal ban on sports betting be overturned, which it was in May 2018. Tribal-owned casinos including the Turning Stone in Verona have also availed themselves of the opportunity to open up shop.

But a main hurdle has been getting the support of New York Gov. Andrew Cuomo, who is somewhat indifferent to sports betting. The governor’s office has maintained since 2018 that a constitutional amendment is required to expand sports wagering in New York to online. But the stance may soften in light of the economic impact from the COVID-19 crisis and the tax revenue the state is forfeiting in the interim. In 2018, stakeholders began parading legendary New York sports figures like former Yankees managers Joe Girardi and Joe Torre during Albany lobbying efforts. Since then, legislators have drafted numerous bills and casinos, the professional leagues, and other stakeholders have been involved in the conversation, but there has been no resolution.

Addabbo: Let’s create ‘veto-proof’ legislation

Sen. Addabbo speaking. (Betting on Sports America Digital Conference)

New York state Sen. Joe Addabbo said Tuesday that the goal now is to create veto-proof legislation. His House counterpart, Gary Pretlow, said a measure would be included in the House budget, which might be proposed before the end of the year. And if it’s not, Pretlow said, the House and Senate would stand together when Cuomo submits his budget in January.

“I’m pretty sure that if we don’t do a revenue bill by the end of December, when the governor submits his budget, the Assembly and the Senate will both include sports betting as part of the revenue package,” Pretlow said. “Last year, the Senate did it. The Assembly did not do it. This year, I’m pretty sure the Assembly will do it. I have enough of my colleagues. They know that we need the money, that there will be revenue deficiencies next year as compared to this year.”

But Addabbo was quick to point out that even if the House passes a budget bill before the end of 2020, the revenue spigot won’t automatically start shooting out dollar bills.

“If it is in the budget before the end of the year, we don’t implement that until April, so understand that we will miss the two biggest events of the year — the Super Bowl and March Madness,” Addabbo said. “And it’s not like flipping a switch on mobile and there is suddenly $200 million in revenue. It’s a process.”

No matter the timing, at this point New York is facing a third consecutive year of watching sports betting dollars flow to neighboring New Jersey while its own political in-fighting makes the news. The Empire State is now bordered by two of the most prolific, dynamic, and profitable sports betting states (New Jersey and Pennsylvania) in the nation.

The panel conversation laid bare New York lawmakers’ and stakeholders’ desire to legalize. There are myriad issues that still need to be resolved, but it’s clear that all parties are willing to negotiate. The number of mobile skins has suddenly become the latest negotiable item. Under the current proposal, the number of digital operators would be capped, and whether that is at seven or 14 the cap itself might stifle the potential for handle or revenue. So far, New York lawmakers have not considered allowing stand-alone mobile platforms that could enter the market without tethering to a casino property.

Of the U.S. jurisdictions where sports betting is legal, some have caps and some don’t. As examples, Tennessee law allows for an unlimited number of mobile/online operators while states like Pennsylvania, Colorado, and Virginia have caps. In Colorado, that number is 33 — one for each retail casino — but in Virginia the current cap is 14, and the state lottery got 25 sports betting operator applications.

Number of mobile skins up for debate

Pretlow has been a proponent of multiple skins all along. Casino owners generally prefer to keep it at one, the theory being that they can reap all of the benefit of digital sports betting, rather than divvying up a pie among a larger number of operators.

The following exchange makes it clear that while all parties have a clear idea of how many skins they want, the number is no longer a major sticking point.

Addabbo: “In an effort to work with Governor’s office, we’ll start with one skin, but if there is a dire need to raise revenue, we can raise revenue with skins, and we’d be open to that,” he said.

Pretlow: “We’d want at least two skins, it gives more opportunity for other companies to get into the act, it increases revenue to the state,” Pretlow said. “Some of the casinos are advocating for one skin, but that’s because they are greedy. In Jersey, they could have (three) skins, and you don’t have to use all three. Nothing that says you have to do it, but at least you have the opportunity.”

Gural: “While I personally think we’d be better off with one skin, I recognize this is an emergency and we would go along with that. Our position has changed a lot. If Gary and Joe and the Governor think it’s important to have two skins, we’re not going to object.”

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