The New York state legislature may soon move to legalize online sports betting. While that comes across as good news for operators and bettors alike, the latest legislative movement also creates a bit of a problem.
Barstool Sportsbook has expanded relatively quickly, launching or laying roots to launch in states such as Pennsylvania, Colorado, Indiana and Illinois, among others. Barstool, though, has a more difficult time setting up shop in New York.
Under the terms of the latest proposed framework for wagering on sporting events online in the Empire State, Barstool would be on the outside looking in. However, nothing is set in stone.
Yet.
Why New York could bar entry for Barstool Sportsbook
Barstool has a partnership with Penn National Gaming. In other states with legal online sports betting and where it has properties, Penn National has leveraged the Barstool brand. However, Penn National does not operate a casino in New York, where online sportsbooks need land-based casino partners in order to launch.
Last year, the New York Senate passed a bill that would have authorized online wagering on sports, but the measure didn’t go anywhere in the House. The tenets of that bill create the framework for potential legislation in the short time left in 2020.
Therein lies the problem for Barstool and other operators looking to enter the fray in New York. That framework only allows for a single “skin” (an online platform contracted with a land-based casino) for each licensee.
As the state wouldn’t issue online-only licenses, that means each licensee would likely keep its skin for its own brand or that of its brick-and-mortar sportsbook. For example, Rivers Casino in Schenectady would take BetRivers online.
DraftKings and FanDuel each would have immediate paths into the online sports betting world in New York, courtesy of their deals with del Lago Resort & Casino and Tioga Downs Casino Resort, respectively. Resorts World Catskills has a deal for online gambling with Bet365.
Thus, there’s no room for Barstool, BetMGM, PointsBet, etc., within those parameters. That said, hope for a wider array of online sports betting options online isn’t completely lost.
What about New York tribal casinos?
Like with the single-skin framework, this approach would also have barriers for online operators. For one thing, most of them already have partnerships in place with other operators such as FOX Bet and William Hill.
The Seneca casinos in and near Buffalo currently plan to handle sportsbook operations themselves. That could be a potential path into the state for an operator, but it seems the tribe has had plenty of opportunities to negotiate a deal with an operator at this point if that’s what it wanted to do.
A partnership with the Seneca tribe could give Barstool the necessary open door. State law gives tribal casinos the option to offer any type of gaming commercial casinos can. And the 2019 Senate bill required commercial facilities to house the physical servers necessary for online sports betting on their properties.
Another possibility with an outside chance of working out would be for Penn National to acquire one of three future casino licenses the state plans to award at some point. Right now, awarding any of those licenses isn’t part of the legislative push.
The only real path forward for Barstool, and other operators without NY commercial casino partnerships, would be a more expansive framework for online wagering from the state’s legislature. There are both powerful allies and opponents of that suggestion.
Bigger NY betting market: Who is on board, who is in the way?
The sponsor of the 2019 Senate bill, Sen. Gary Pretlow, said he would like to expand the number of skins for each licensee to two. In theory, that would give Barstool a shot to operate an online sportsbook in New York.
However, Pretlow risks losing support for his proposal if he expands on the framework. The owners of the state’s four commercial casinos have made it clear that they prefer the single-skin model.
Additionally, hopes for passing the bill already sit on a razor’s edge. Gov. Andrew Cuomo has long maintained his stance that the only path to expanding legal sports betting in the state is through a constitutional amendment.
Thus, he may veto any bill that he sees as pushing the issue too far. Allowing multiple skins per licensee may fit that definition. While the legislature could override his veto, that would require overwhelming support in both chambers.
Other possibilities for land-based partners include off-track betting sites and sports stadiums. While Pretlow’s bill does allow for stadiums with capacities of at least 15,000 to eventually offer regulated wagering, that legislation did not include OTBs.
So how likely is any of this to actually happen soon?
As with every other tenet of the most recent sports betting proposal, it’s all tentative right now. The state legislature is waiting to see what the federal government does in terms of providing emergency funding for states recovering from the COVID-19 pandemic.
After that situation resolves itself, the state legislature may take further action to shore up revenues. To help, House Speaker Carl Heastie has committed to including New York online sports betting in a revenue bill this year.
So, yes, it’s possible that New York could green-light online sports betting in 2020. However, as it stands, Barstool could be left out.
