Governor of New York Andrew Cuomo has announced legislation to authorise mobile sports wagering within the region, as part of the 2020 State of the State address.
Under the motion, the New York State Gaming Commission will issue a request for proposals to select and license a sports operator or platform to offer mobile sports wagering in the region.
This operator or platform must have a partnership with one of the existing licensed commercial casinos. The Commission will also require any entity operating mobile wagering apps to include safeguards against abuses and addiction.
Sports wagering is now legal online in 14 states, including the bordering states of New Jersey and Pennsylvania, while it is only legal in New York at the four upstate commercial gaming facilities and Native American venues.
An industry study found that nearly 20 per cent of New Jersey’s sports wagering revenue comes from New York residents, a situation which is said to be costing the state millions of dollars in lost tax revenue.
“At a time when New York faces a historic budget deficit due to the COVID-19 pandemic, the current online sports wagering structure incentivises a large segment of New York residents to travel out of state to make online sports wagers or continue to patronise black markets,” Governor Cuomo said of the proposal to legalise online sports wagering.
“New York has the potential to be the largest sports wagering market in the United States, and by legalising 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.”
Adding that: “We want to do sports betting the way the state runs the lottery, where the state gets the revenues. 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. I’m not here to make casinos a lot of money, I’m here to raise funds for the state. So, we have a different model for sports betting.”
Following up on the comments is Robert Mujica, director of the budget, who elaborated on the state’s aims of maximising returns: “So, the narrative out there has been that the state is losing billions of dollars to other states to sports betting. But the reality is that the billions of dollars that are being wagered and the money that’s being made are not being made by the taxing jurisdictions.
“New Jersey, for example which is the most commonly used example, in the entire three years of sports betting they collected less than $80m, actually only $45m in 12 months, compared to the billions that are being talked about.
“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 sportsbooks, but the state ends of getting the majority of what is left over after everything is returned to the bettors.
“So, the difference between the two estimates would be between the state making somewhere in the neighbourhood of $50m a year versus $500m a year. So, the way the governor’s proposing it and we’ll advance it is so that the state can get up to $500m a year instead of $50m, and that money would then go to the state budget.
“Otherwise, for the betters it’s seamless and it’s exactly the same. The only difference is the state gets the money versus others. That’s the proposal, which you’ll see when the governor puts out his executive budget.
