In response to New York Gov. Andrew Cuomo’s Wednesday announcement that he endorses a lottery run, single-entity sports betting system, two state lawmakers filed bills Thursday calling for an open, competitive sports betting landscape with statewide mobile sports betting in which each retail sportsbook could partner with two digital platforms.
The bill, jointly filed as S 1183 and A 1257 by Sen. Joe Addabbo and Assemblyman J. Gary Pretlow, resemble S 17D and A 6113, which the pair filed during a previous session. Among the highlights are that the bills call for what would be among the highest license fees in the country: $12 million per operator. Both Pennsylvania and Illinois have $10 million license fees for retail locations or mobile platforms tied to brick-and-mortar casinos, while Illinois has a $20 million licensing price tag for stand-alone mobile platforms.
The bill appears to allow for retail wagering at casinos and off-track betting parlors affiliated with casinos throughout the state.
Addabbo was initially enthusiastic about Cuomo getting on board with sports betting, but once it was clear that the governor was pushing a lottery, and possibly a single-entity model, he had this to say: “I think we’re creating a monopolistic kind of setup, which I don’t think bodes well for casinos in New York.”
What’s in Addabbo-Pretlow bill?
On balance, Addabbo and Pretlow haven’t changed too much compared to past filings, though this latest version clearly acknowledges and includes Indian Country — there are eight federally recognized tribes in New York and three tribal casinos. At present, four upstate casinos are live with in-person sports wagering, which began July 16, 2019. The casinos partnered with Bet365 (Resorts World Catskills), BetRivers (Rivers Casino Schenectady), DraftKings (Del Lago Resort and Casino), and FanDuel (Tioga Downs). Under Cuomo’s Wednesday proposal, it’s possible that only one of those operators would be able to go live online in New York.
Addabbo and Pretlow are pitching statewide mobile, which is attractive to sportsbook operators, but the bill has some quirks.
Other key items include:
- An 8.5% tax rate on retail gross gaming revenue, and 12% on mobile/online ggr;
- A .2% royalty on handle to be paid to sports governing bodies (i.e. the NFL or Major League Baseball);
- A mandate to use official league data;
- The prohibition of betting on New York State college teams or any collegiate events that take place in the state of New York;
- The New York State Gaming Commission will be the regulator;
- Remote registration, meaning a customer can register for a mobile wagering account from a mobile device or computer without having to appear in person at a sportsbook location.
If passed, the law would be immediately effective.
While the tax rates would be attractive to operators, should New York pass a law with a royalty or “integrity fee,” it would be the first state in the U.S. to do so. A 2021 Missouri bill calls for one as well — but like in New York, lawmakers there have been pitching the same bills for several years with no real movement.
States that will offer legal sports betting in '18 that have not or will not grant leagues an "integrity fee" or royalty:
States that *will* be paying the leagues some fee:
— Sports Handle (@sports_handle) June 22, 2018
The use of official league data is a fairly new phenomenon, which started when Tennessee lawmakers included that requirement in 2019. Since then, lawmakers in Illinois and Michigan (where operators are expected to go live later this month) included it. And the so-called “college carve out,” which means betting on local teams is banned, is never popular with stakeholders, who say it allows the black market to thrive.
Discussion promises to be spirited
New Yorkers could continue to go to Pennsylvania to wager on any college team they like, but betting on in-state college sports is illegal in neighboring New Jersey, where studies show that 20% or more of handle for the last three years has been coming from New York bettors.
Gov. Cuomo says he wants NY to run online sports betting like the state lottery with the goal of raising $500M/yr for the state. Budget director Rob Mujica says a legal marijuana system could raise $300M/yr, but that effort has a "longer runway" before it is ready
— WAMC News (@WAMCNews) January 6, 2021
New York lawmakers have been trying to legalize sports betting almost since the Professional and Amateur Sports Protection Act was overturned in May 2018, but have been unable to come to a consensus. Until Wednesday when Cuomo announced he’d release a sports betting proposal, he had been a key roadblock, leaving sports wagering revenue out of his budgets and speaking out against legalizing.
The governor’s announcement, along with the filing of the new bill, sets up a contentious situation in New York. Both parties now at least appear to support legal sports betting, but there is little, if any, common ground with regard to what sports betting would look like in practice.