New York Sports

Reality Check: New York State Is Years Away From Online Sports Betting

reality check sign

Supporters of online sports betting legalization in New York State are having a rough week.

A day after Governor Cuomo splashed some cold water on the idea of a fast-paced timeline, a state Assembly member introduced a bill that would establish a “task force” to evaluate how to implement some gambling in the state. The unpaid board would have until the end of 2020 to complete their report.

While there are merits to studying any policy issue, the timeline likely would be pushed back even further if the bill isn’t signed into law by the end of the legislative session in June. A constitutional change would require “consecutively elected state legislatures” to approve before a statewide vote by the public. So even if the board wraps up its report as scheduled, legislators may prefer to wait to read its conclusions before starting the clock on a pair of approvals – and suddenly a delay of up to five years doesn’t seem so farfetched.

(It doesn’t help that Assemblyman Clyde Vanel introduced a very similar bill last April that had the end of 2019 as the report deadline.)

And while a separate bill introduced by Assemblyman Joseph Addabbo Jr. this week proposes to get the ball rolling on a vote this year to set up another for next year, it has its own complications.

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That’s because Addabbo’s bill brings the state’s racinos – racetracks with slot machines, basically – and the Off-Track Betting sites into the picture along with permitting online sports wagering, which may set up a mighty turf war for sports betting dollars.

Given the number of powerful lobbying interests involved, approval of online sports betting hardly is a sure thing either in Albany or among the public.

As an example, a 2016 ballot question in neighboring New Jersey regarding expansion of casinos to the northern portion of the state was crushed by a 4 to 1 margin thanks in significant part to a record $14 million spent in opposition – with nearly all of the money for the “Trenton’s Bad Bet” campaign against unpopular lawmakers actually coming from New York and Atlantic City casino interests who successfully protected their turf.

NY online sports betting battle preview

While the four upstate commercial casinos and the seven Indian casinos in the state would have reason to back online sports betting proposals which would benefit them, Yonkers Raceway and Aqueduct racinos in Queens – as well as other horse racing interests – already seem to have gotten started lobbying for their own place at the table. There also are groups such as the Las Vegas billionaire Sheldon Adelson-backed Coalition to Stop Internet Gambling that might well see New York State as an ideal battleground in their efforts to slow the tide nationally.

There had been sentiment by some Albany lawmakers that a constitutional amendment might not be necessary to add an online betting component, but after months of confusion the state’s budget director, Robert Mujica, seemed to settle the matter on Tuesday. (Addabbo’s bill seems to underscore that fact.)

The current law, enacted in 2013, Mujica told reporters, “doesn’t open the door for sports betting anywhere else but the land-based casinos. If we want to expand it beyond the land-based casinos, including online, you need a constitutional amendment. And that’s a separate conversation.”

That law allows for up to seven commercial casinos to be built in the state – but only a maximum of four before 2022, and none in the New York City metropolitan area in the first phase. The tribal casinos have their own compact with the state that permits them to match whatever their commercial rivals are doing on sports betting.

FanDuel and DraftKings have estimated that about 10 percent of their online sports betting business in New Jersey is coming from Empire Staters. If that fraction holds across the board, then up to $100 million or more of the total handle in New Jersey in the last six months can be attributed to New Yorkers, and well over $1 million per month in extra revenue to the sports betting operators thanks to Albany’s lack of urgency to begin competing for that sports betting dollar.

Let’s authorize what we already authorized

Cuomo made a curious comment in his State of the State speech on Tuesday: “We invested in upstate casinos. Let’s authorize sports betting at the upstate casinos. It’s here, it’s a reality, and it will help generate activity in those casinos.”

But the betting already was authorized by that six-year-old bill – signed into law by Cuomo – that opened the door for construction of the casinos, with the contingency that the betting would be on hold until a federal ban was removed. With a U.S. Supreme Court ruling doing just that last May, the casinos simply have been waiting for the state’s gaming board to approve formal regulations.

All four casinos – including Resorts World in the Catskills, which last fall inked a partnership with Bet365 – have underperformed their projections during their brief existence. The other casinos are Rivers in Schenectady; del Lago in the Finger Lakes region; and Tioga Downs – owned by Meadowlands Racetrack operator Jeff Gural – in the state’s so-called Southern Tier.

Resorts World, which cost $1 billion to build, has fared worst by far, however, based on industry metrics such as net win per slot machine.

The Monticello site is slightly closer to heavily-populated Bergen County in northern New Jersey than eastern Pennsylvania casinos. But those residents can settle for a much shorter trip to the Yonkers, N.Y. racino to play slots, to the Meadowlands to make a sports bet at the racetrack’s grandstand, or to their living-room couch to bet on sports online.

Task force details

Vanel’s bill calls for a 10-member task force board:

  • Assembly Speaker appoints three;
  • Senate President appoints three;
  • Minority leaders of each get one apiece;
  • one seat for the New York State Gaming Commission;
  • and one for the state Division of Gaming.

These would be unpaid positions, which would not bode well for any hopes that the report might get finished well ahead of the deadline.

The task force would be asked to “identify policies and programs that mitigate the risks and consequences associated with online sports betting and promote responsible gaming practices.”

Other provisions are for figuring out proper regulations, including penalties for violations, and to “identify methods to measure effectiveness of any online sports betting procedures.”

At this rate, New York lawmakers figure to have years of data from the forays of New Jersey, Pennsylvania, and other states to rely on in making these decisions.

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