Ny Sports Betting Online
Posted : admin On 7/25/2022We have arrived. The most wagered-on event in sports betting. The Super Bowl.
The Buffalo Bills failed to reach the big game, but Super Bowl LV will no doubt attract plenty of attention in New York. How could it not? Tom Brady and the Tampa Bay Buccaneers, the first team to play for the Lombardi Trophy in its home stadium, against Patrick Mahomes and the Kansas City Chiefs.
“New York has the potential to be the largest sports wagering market in the United States, and by legalizing online sports betting we aim to keep millions of dollars in revenue here at home, which will only strengthen our ability to rebuild from the COVID-19 crisis,” said Cuomo in a release just two weeks ago. Jan 26, 2021 For the time being, New York sports betting locations are limited to land-based casinos. Legally, New Yorkers cannot yet place a bet online or at an off-track betting (OTB) facility. Here are all the casino locations currently accepting NY sports bets.
While Super Bowl betting will spike in jurisdictions that have legalized wagering, New York sports betting will miss out on hundreds of thousands of dollars in tax revenue because it lacks regulated online sports betting. Super Bowl betting in NY will only take place in retail sportsbooks.
Even a conservative estimate of the impact of online sportsbooks in New York shows how much the state could have benefited from offering legal options to wager online.
What could have been if New York had legal online sports betting
There’s no doubt about the demand for online sports betting in NY. A recent estimate puts the value of mobile betting handle at $20 billion annually in the Empire State. Earlier figures suggested that New Yorkers crossed the state line to make legal wagers in New Jersey to the tune of $837 million in 2019.
A state-commissioned study indicated that mobile wagering in New York could lead to $1.1 billion in annual gross gaming revenue in three to five years. The study, done by Spectrum Gaming Group, also noted that the state could pocket more than $100 million each year in state revenue.
That $837 million figure from 2019 doesn’t count the number of New Yorkers crossing another border, into Pennsylvania, to wager online. This year, NY residents will no doubt contribute toward Super Bowl handle estimates of $75 million in New Jersey and $55 million in Pennsylvania.
The Super Bowl is the single biggest betting day of the year for US sportsbooks. So what would New Yorkers wager online this year if they had the option to do so legally? It’s important to remember three things in forming a guess here:
- Not all online bettors instantly gravitate to legal books when they become available.
- It’s possible that legal betting apps in New York could pull traffic from residents of neighboring Connecticut, Massachusetts, and Vermont.
- In this hypothetical situation, online wagering would be legal statewide, so more than just the population of New York City counts.
With those things in mind, assume handle in New York (in its first year) could compete with that of nearby New Jersey. The state is populous, has a robust sports presence, and the population is familiar with the concept of legal gambling. Those things lend well toward a strong performance.
How much tax revenue could Super Bowl online sports betting produce?
Let’s take the hypothetical scenario of NY legalizing online sports betting in 2020. Had the state done so, a conservative figure for Super Bowl handle in New York this year would be $70 million. It’s likely that the event could be worth more when the market hits maturity, as Spectrum projected. But in this example, bettors would be placing legal Super Bowl bets online in New York for the first time.
Another thing that’s necessary to quantify is a hypothetical hold. Sportsbooks don’t always clean up on Super Bowl wagers. As a matter of fact, legal books in both New Jersey and Pennsylvania have yet to record a Super Bowl Sunday in which they won.
For the sake of this example, assume the books collectively held 5%. Furthermore, assume the state lands on a tax rate of 10% for aggregate revenue and doesn’t allow operators to comp their promotional credits.
Those operators would hold an estimated $3.5 million (5% of $70 million). Taxed at that rate, that would mean $350,000 in revenue for the state. That’s not enough to solve the state’s current budget deficit. However, it’s quite a windfall from just one game.
Instead, this year, all that handle will go to legal books in New Jersey and Pennsylvania. Or even to offshore websites. New York could be close to correcting that issue, on some level. To what degree that happens depends on whether New York online betting is a state-run monopoly like Gov. Andrew Cuomo wants or a competitive market.
Will Cuomo’s plan handcuff Super Bowl online betting potential?
If Cuomo gets his way, Super Bowl handle might be a shadow of its potential. If the state enacts a broader framework, however, there’s cause for optimism. A single-operator system can not only lead to short odds but also a lack of promotional offers to draw bettors to the regulated market.
As a result, a lot of New York bettors could stick with their offshore channels or keep crossing state lines because they can get a better deal. Less handle means fewer tax dollars for the Empire State. On the other hand, a more open system could help out a lot.
The latest proposal out of the legislature in Albany would tether online wagering to the state’s commercial and tribal casinos. Such a proposal would give each property and tribe an extra skin to delve out. That could mean as many as 14 online sportsbook options in the state.
It would also bring some of the nation’s strongest brands into the market. BetRivers, DraftKings, FanDuel and William Hill have all already negotiated access with casinos. The extra skins would also give other books like BetMGM and PointsBet a path into New York.
So far, legislators seem determined to push through their version instead of Cuomo’s. Assemblyman Gary Pretlow, who chairs the Racing, Gaming, and Wagering Committee, called Cuomo’s plan “nonsense.” There’s always a risk that Cuomo could veto any bill that strays too far from his preferred route, however, and there may not be enough votes in the legislature to override that.
While leaders in Albany work out the details, the state treasury sits bereft of the potential hundreds of thousands of dollars that online sports betting on this year’s Super Bowl could have wrought. If a stalemate develops, the same may go for 2022 and beyond.
With New York facing a $15 billion budget shortfall from the coronavirus pandemic, online sports betting is viewed as one possible way to inject much-needed money into the state. New Jersey legalized online wagers in 2018, and earlier this month, Governor Andrew Cuomo included an online professional sports betting plan in his executive budget proposal that he claimed would raise $500 million in revenue for the state.
But many logistical hurdles remain. Cuomo’s proposal for legalization runs counter to what the Democratic supermajority in the state legislature is pitching. Some authorities are questioning the legality of the whole enterprise. And there are lingering concerns about gambling and addiction, particularly with the number of people sequestered at home and the opportunities that could be suddenly available to lose significant amounts of cash.
“I don’t see the governor’s proposal as workable in New York,” said Assemblyman Gary Pretlow, the chairman of the Committee on Racing and Wagering.
Right now, you can place horse racing bets on your smartphone through an app run by the not-for-profit corporation that oversees horse racing in New York’s three major tracks. Mobile betting for professional sports could theoretically function in a similar way. Currently, the servers for horse betting are located at the racetracks.
In both Cuomo and the legislature's proposals, the servers for mobile sports betting would be situated at places where bets are already taken, like casinos. The major overriding question is how many operators, or “skins,” as they are called in the industry, there will be, and who will get to profit.
Ny Sports Betting Online News
Under Cuomo’s proposal, which still needs to be fleshed out further, the New York State Gaming Commission would be directed to solicit bids for a small number of mobile sports wagering operators. The system would be akin to how the state-run lottery functions, with possibly only one or a small number of operators overseeing sports betting. A single operator runs online sports betting in New Hampshire, Oregon, Rhode Island and the District of Columbia. Overall, sports betting is now legal in more than two dozen states.
Robert Mujica, Cuomo’s budget director, said earlier this month that the advantage of the state proposal would be the ability to maximize tax revenue. “The fundamental question is: if you want to support the bottom line for casinos or New York’s students. And the governor’s proposal chooses students,” Mujica told the Wall Street Journal. (An identical statement was sent to Gothamist from Freeman Klopott, a budget spokesman for Cuomo.)
It’s not clear yet what Cuomo’s tax rate would be for his online betting model, though Mujica has asserted that it would be enough to raise $500 million a year. The state legislative proposal, co-sponsored by Pretlow and the chairman of the State Senate’s Racing and Wagering Committee, Joseph Addabbo, puts the number closer to $100 million annually.
At first glance, that would seem to make Cuomo’s proposal the better one, given the potential for serious state budget cuts without new forms of revenue. But lawmakers and some gambling industry insiders aren’t so sure. In New Jersey, which is generally viewed as a success given the number of people who place bets, there are as many as 17 legal online sportsbooks.
New York’s legislature is looking to take a similar approach, believing their proposal has a better opportunity for growth—more operators can lead to more options for consumers and more interest in placing bets. Addabbo calls his legislation “inclusive,” because it would also allow for Native American casinos, casinos on state property, and off-track betting sites to participate.
“Competition bodes better for our residents and will drive up revenues than being a narrow state-run lottery kind of system,” Addabbo argued. “New York finds itself in a very odd position not being a leader. We are outside looking in. New York right now is a three-wheeled car limping along in the right lane. New Jersey and Pennsylvania are speeding by us.”
Bennett Liebman is a government lawyer in residence at Albany Law School who previously advised Cuomo as the deputy secretary for Gaming and Racing. He said the difference between the two models is a question of what is being prioritized: more tax revenue, or a better model, long-term, for consumers and gambling interests?
“It all depends on what you want in your market. If you want what the governor is seeking, which the draft is very general, you are looking for maximum tax revenue, you will give it to one or two groups and you are going to tax them at a very high rate,” Liebman said. “If you are looking to create a robust market to help out casinos and consumers, then you go with, or you are more inclined to go with, the legislative plan.”
Liebman called the Cuomo administration’s $500 million revenue figure for online sports betting “very, very high,” and predicted a few operators would dominate the space in New York, like DraftKings and FanDuel have done in New Jersey. Casinos, racetracks, and online gambling in total generated a little more than $300 million in tax revenue for New Jersey in 2020.
Even if New York reached Cuomo’s projections—let alone the far smaller figure from the state legislature—online sports betting would represent only a minuscule fraction of a state budget that was $177 billion last year. One question hanging over the debate is whether the united front fighting for mobile sports betting in New York—the currently existing casinos, and operators like DraftKings and FanDuel—would crumble if only a small number of them were selected to make money from sports betting.
According to a constitutional amendment passed in 2013, sports wagering in New York is currently allowed only in physical portions of its four existing commercial casinos and other facilities operated by Indian tribes. Cuomo and supporters of online sports betting believe their proposal will meet the requirements of the state constitution by locating the servers for the betting websites at the physical casinos.
Neil Murray, an Albany attorney who has sued to oppose gambling in the state, said there was a “legitimate, serious question” about the constitutionality of online sports betting.
Ny Sports Betting Online Betting
“The problem right now is the constitutional amendment that was passed several years ago does carve out exceptions for gambling at casinos. The operative word is ‘at’ and what does that mean?”
Murray argued the way the amendment was proposed—an economic stimulus for destination casinos that would prevent the proliferation of gambling statewide—contradicts the arguments made for mobile sports betting today. “If you allow online gambling and people can gamble from their living rooms, then of course that destroys the whole purpose on which gambling was authorized on a limited basis to begin with,” he said. “Everybody is counting on collective amnesia.”
Pretlow, the state assemblyman, contended that his bill met the requirements of the state constitution but Cuomo’s would not if it chose to operate like the state lottery. The lottery is regarded as a game of pure chance with no skill involved, allowing it to circumvent a longtime prohibition on gambling in the state.
“The lottery has to be 100 percent chance. The lottery is not gambling,” Pretlow said. “It’s flip a coin, heads or tails, nothing in the middle. I think if the lottery were to handle sports betting, it would lead to a constitutional question.”
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