Online sports betting supporters in the US state of New York have been boosted by new political developments in the state legislature.
New York state Senator Joseph Addabbo, together with state Assembly member Gary Pretlow have put forward a new plan for the regulation of mobile sports betting in New York. The move comes just days after Governor Andrew Cuomo signalled that he could support legalization of online sports betting, through the state lottery this year.
Addabbo’s SB1183 and Pretlow’s A1257 were filed on Friday and propose the amendment of the state’s Racing, Pari-Mutuel Wagering and Breeding Law in order to allow commercial and tribal casinos to offer mobile sports betting to New York customers.
Licensees in the proposed industry would pay a $12 million fee for the right to operate in the state together with a 12% gross revenue tax, which is considerably higher than the 8.5% rate set for in-person betting. In return, each operator would be given approval to operate two skins under its license. Currently, there are four commercial casinos and three tribal venues in New York state, which suggests that up to 14 betting brands would be permitted in the market.
The proposals also include room for other venues, including sports stadiums and off-track betting facilities, to take part in the mobile betting market as affiliates of the casinos, by hosting betting kiosks on-site. This proposal had been part of an earlier push by Addabbo and Pretlow to introduce mobile wagering legislation, back in the summer of 2019.
The proposals allow for three categories of bet types. Tier one wagers would be those that are decided by the outcome of a sporting event. Tier two would cover any bet placed in play that does not relate to the final score, and tier three covers all remaining bet types. In addition, betting operators would be required to pay a 0.2% levy on all sports betting wagers, which would be paid to sports organisations as a royalty fee.
Addabbo’s SB1183 has now been referred to the Senate Racing, Gaming And Wagering Committee, and Pretlow’s A1257 is before the Assembly Racing and Wagering Committee though it remains to be seen how they will progress as there appears to be a contradiction with Governor’s plan.
Cuomo’s comments were made following speculation that he was considering dropping his long standing opposition to legalisation, which he had argued would require a constitutional amendment and a referendum. His change of stance has been driven by the need to address the financial crisis in New York state, caused by the coronavirus pandemic. But his proposal envisaged seeing gambling run by the state lottery, on the grounds that other states that had allowed casinos to run the sector had not seen the kind of sums of revenue raised that had been expected.
The budget director of New York state, Robert Mujica, also commented on the issue, pointing out that neighbouring New Jersey had only produced tax revenue of around $80 million in just under three years since the launch of sports betting, due to the structure of the sector:
“The reason being everyone else is making a lot of money off of sports betting, the jurisdiction where it’s in the state is not. There are a few states that have done it a different way, where the state contracts with the private sector who runs the sports books, but the state ends of getting the majority of what is left over after everything is returned to the bettors.”
According to Mujica, the difference between the two models could be as much as $450 million dollars, and he went on to indicate that the upcoming Budget would contain more details of the Governor’s proposals. Which approach to sports betting prevails remains to be seen, but it seems increasingly likely that some form of mobile sports betting will be introduced in New York this year.