Which version of sports betting regulation will the state of New York end up?
Once all the lobbying and horse trading has taken place what form of state-approved betting regulations will be presented?
First the good news. The U.S. betting industry was pleasantly surprised by Gov. Andrew Cuomo’s statement that New York state would seek to regulate mobile sports betting in 2021.
New York is the fourth largest state in the U.S. and revenue forecasts of $20bn in the first year of being live quickly followed.
However, Cuomo then followed up by stating his preference for a monopoly model.
Senator Joseph Addabbo and Assemblymember Gary Pretlow then presented their own bills at the end of last week.
These would allow commercial and tribal casinos to offer mobile sports betting.
The proposals were very similar to those put forward by both representatives in 2019.
One change would see license holders allowed to operate two skins under their license instead of one.
With the state’s four commercial and three tribal casino operators, some 14 brands would be competing.
Sports stadiums and off-track betting outlets could also be allowed to operate in the market by hosting betting kiosks on their premises.
In effect such a model would make New York look very similar to what is in place in other states like New Jersey, Illinois and Indiana.
Prioritizing state revenues
Cuomo said his preference for a monopoly model came from New York’s urgent need for tax revenues.
“We want to do sports-betting the way the state runs the lottery where the state gets the revenues,” he said.
“Many states have done sports-betting, but they basically allow casinos to run their own gambling operations.
“That makes a lot of money for casinos.
“But it makes minimal money for the state, and I’m not here to make casinos a lot of money. I’m here to raise funds for the state.”
Budget Director Robert Mujica explained that the ‘skins’ model of regulation would generate around $50m a year in taxes. But a monopoly operator could bring in $500m.
How quickly that can be achieved however is harder to ascertain.
In addition, the quality and attractiveness of the product would have to be guaranteed to channel as many New Yorkers as possible to the only regulated option for remote betting.
The experience of brands like the D.C. Lottery’s GambetDC or Oregon Lottery’s Scoreboard is another cautionary tale.
Competition abounds
With New Jersey on their doorstep and offshore sportsbooks also easily accessible to NY punters, it doesn’t take long for critics to disabuse Cuomo of his plans.
John Pappas, lobbyist with CorridorDC, told Wedge News: “On the surface, the commercial and tribal casinos who are left on the side-lines, would have a strong legal argument against and non-competitive mobile market.
“Especially since they are already authorized to offer retail betting.”
Pappas added that the proposals did nothing to address the issue of leakage across state borders.
“Those players will not simply abandon the loyalty they have built up.”
The ‘skins’ model of regulation in general has shown that it generates competition and choice for consumers.
And with such revenues at stake for New York’s commercial and tribal stakeholders, we can expect the lobbying to intensify in the coming weeks.
