NY Mobile Sports Betting Update: Prognosis Good, But Still More Questions than Answers

Posted on: April 5, 2021, 10:35h. 

Last updated on: April 6, 2021, 11:22h.

Steve Bittenbender Read More
Expertise: Legislation, Sports Betting, Horse Racing.

New York Gov. Andrew Cuomo says there’s “a conceptual agreement” in place for a state budget that includes mobile sports betting, and it appears – based on the Democratic leader’s words Monday – that his vision for sports betting with some tweaks may have won out.

New York Cuomo
New York Gov. Andrew Cuomo announced on Monday a new public service announcement campaign tied to COVID vaccinations in areas where the coronavirus caused the most harm. Later in the day, he said he and legislative leaders have a budget framework in place that includes legalizing mobile sports betting. (Image: Kevin P. Coughlin/Office of Governor Andrew M. Cuomo)

State leaders blew past the last Thursday deadline to get a spending plan for the 2021-22 fiscal year in place. Reports have indicated that one of the last hang-ups has been how to bring mobile apps online in New York.

It’s likely that a recent development regarding tribal gaming compacts has further muddied the waters. In recent days, lawmakers and leaders in central New York raised concerns that residents in a 10-county area, including Syracuse, may end up excluded. That’s because the state deal with the Oneidas gives them exclusive gaming rights in the region.

So New Yorkers can probably feel good that they may no longer have to cross the Hudson River to bet legally in the near future. But there’s still a lot of details that need to be filled out. When that will happen is anyone’s guess. And that’s just one of several questions that are lingering right now.

Cuomo Wants Tribal Casinos Involved

In addressing a question about the possible Oneida compact conflict, state Budget Director Rob Mujica told reporters that they are working to find a way that allows tribal entities to participate.

We want the Oneidas to participate,” Mujica said. “We want to honor all the terms of the existing compacts, and we are actively working to draft the legislation that will reflect all of those principles.”

After Cuomo and Mujica spoke to reporters, a contingent of Democratic state lawmakers sent a letter to Cuomo, Assembly Speaker Carl Heastie (D-Bronx), and Senate Majority Leader Andrea Stewart-Cousins (D-Yonkers) making a similar request.

Assemblymembers Marianne Buttenschon (D-Utica), Pamela Hunter (D-Syracuse), Albert Stirpe (D-Cicero), William Magnarelli (D-Syracuse), Karen McMahon (D-Amherst), and Pat Burke (D-Buffalo) were joined by state Senators Sean Ryan (D-Buffalo) and John Mannion (D-Geddes) in signing the letter. The lawmakers represent communities that are part of exclusive gaming areas for either the Oneida or Seneca nations.

“This proposed breach (of the Oneida compact) could result in a loss of $70 million in gaming payments to the state and to the counties, as well as tax increases and the loss of thousands of jobs across central New York,” the lawmakers wrote. “Similarly, the Seneca Nation could thwart efforts to introduce non-tribal mobile sports betting in western New York through its separate tribal compact. This result would be unacceptable.”

While the Oneida zone includes Syracuse, the Seneca exclusive zone includes Buffalo and Rochester. And Seneca leaders and New York officials aren’t seeing eye-to-eye right now about that compact anyway.

New York City remains by far the largest market in the state. However, the loss of several million people in upstate markets would cut in on how much revenue could generate from online sports betting.

A Lottery Approach to New York Sports Betting

Speaking of revenue, Cuomo has made the lottery-style approach his hill to die on in negotiations.

Cuomo wants to cut out the casino as a middleman. Instead, he wants to award contracts with at least one sportsbooks through a competitive bid process. He has said previously that approach could generate $500 million for the state annually.

“Should you let the casinos make the money, or should the state make the money directly?” Cuomo said Monday. “My position is the state should make the money directly, and then let the state decide what to do with it.”

Rumors have circulated that Cuomo’s sports betting plan is being adjusted to accommodate for more operators. That would possibly open the door to books that operate at tribal casinos, and perhaps ones that entered into agreements with upstate casinos in hopes the state went with a multi-skin approach through the casinos.

Assemblyman Gary Pretlow (D-Mount Vernon) and state Sen. Joseph Addabbo (D-Queens) have pitched such an approach through casinos. That approach brings in revenue at the beginning through license application fees. The current proposal calls for $12 million per operator. However, the approach would likely tax operators at a lower rate than the state would get through a revenue-sharing partnership.

That said, depending on how the revenue-sharing agreements are set up, that, too, could hinder the market. Could a high cut for the state lead to less attractive odds for bettors? Would a limited choice of betting options still drive New Yorkers to go across state lines? Worse, would they choose to stick with their illegal bookie or offshore book?

In addition, what kinds of bonuses would sportsbooks be able or be willing to offer, knowing they’re probably going to give half of what they earn to the state? If sportsbooks opt against big bonuses, would that keep some prospective customers from signing up?

More Questions than Answers, Still

At this point, the questions are just mushrooming regarding the competitive bid process. How long will it take for the state to draft the request for proposal (RFP) and award contracts? These competitive solicitations can get drawn out, especially if the RFP is confusing or a losing bidder decides to appeal. And just who would be eligible to bid?

Back in January, Cuomo said he wanted sportsbooks partnering with a casino – even though he was cutting the casinos out of the process. Is that still the case? Or would the legislation allow other sports betting entities a chance to get in on the market?

Something else to keep in mind. Addabbo and Pretlow, both of whom oversee their chamber’s wagering committees, may not necessarily be in the room (or Zoom call) in these final negotiations. Reports indicate that Cuomo and lawmakers agreed to a significant increase in the millionaires’ tax, a move Cuomo once opposed. Would he – or did he – give in on the tax hikes in return for operating sports betting his way?

So, right now, there still are way more questions than answers. Prospects for mobile sports betting in New York in some way, shape, or form look very good. However, whether New York’s betting public will like the finished product is yet another question.