Gov. Andrew Cuomo wants New York to be in the online sports betting business.
Cuomo discussed sports betting Tuesday in his budget address and released limited details in his executive budget briefing book.
“Here the question is not really whether or not we do mobile sports betting,” Cuomo said in his budget address. “The question is more how. Who makes the profit, and this is very lucrative.”
Cuomo added that New York could do online sports betting in one of two ways. One is through casinos with the state only collecting tax revenue. The second is to have the state run mobile wagering itself the way it does the lottery.
He wants to cut out the middle man.
“One proposal is we allow casinos to run mobile sports betting. That’s very good for casinos and the people who support casinos. The second alternative is to have the people of the state of New York actually get the profits from mobile sports betting and run it the way we run state lottery, which is it’s state run and the state gets all the revenue. I’m with the people, and I believe the people of the state should get the revenues.”
Details of governor’s online sports betting proposal
Cuomo chose not to release full details of his 2022 fiscal year budget proposal along with his speech.
The budget briefing book had this to say about sports betting:
“The Budget authorizes mobile sports wagering throughout the State. Currently, sports wagering is limited to in-person betting at the four upstate casinos. This change would bring back revenue generated by New Yorkers wagering in other states where mobile sports betting is already allowed, increasing revenues in New York State directed to education.”
The budget allocates $49 million from mobile sports betting revenue for the 2022 fiscal year. It also features $357 million in the 2023 fiscal year. Budget director Robert Mujica said the state expects $500 million annually once the market matures.
It remains unclear whether Cuomo wants sports betting done through a single operator.
Cuomo’s press release last week indicated the New York State Gaming Commission would issue a request for proposal to select a sports betting operator. His official 2021 agenda included the amended phrase, “one or more providers.”
Lawmaker reaction to governor’s comments
New York Sen. Joseph Addabbo Jr. questioned why Cuomo implies a tumultuous relationship exists between casinos and state.
“It should never be us versus the casinos,” Addabbo told PlayNY. “The idea is it behooves the state to work with these casinos. The casinos then hire residents of New York, and when the residents get hired now they pay taxes and buy things. Helping the casino industry in turn helps the state.”
Addabbo, chair of the Senate Racing, Gaming and Wagering Committee, also scoffed at the governor’s claim that his proposal is for the people.
“We’re about people too,” Addabbo said. “I’m about people getting rehired, those 5,000 casino workers that have been paid off due to the pandemic. They’re people too. To me, it’s about the bigger picture of making sports betting sustainable, not a short-term money grab for the state.”
Addabbo added that the people of New York should have access to online sports betting products as good as what they can get in New Jersey or Pennsylvania. If not, bettors will continue making their bets in other states.
Additional New York gaming proposals in budget
The executive budget briefing book mentions several more issues related to the gaming industry.
- Setting up a process allowing a casino to petition the Gaming Commission for slot tax rate reduction no lower than 25% based on certain criteria with a final determination made by the Director of the Budget.
- Authorizing the Gaming Commission to issue a request for information for the purpose of soliciting interest regarding the three unawarded gaming facility licenses authorized by the State Constitution.
- The briefing book notes that the Commission plans to increase the number of Take 5 drawings to twice-per-day in FY 2022.
Addabbo believes casinos already had the right to petition to reduce the tax rate, currently between 37% and 45% depending on the casino.
“I don’t see how that’s a novel idea,” Addabbo said. “If it was said today that there will be a reduction, we just don’t know how much, now that’s different. Now casinos would have something to be a little hopeful for.”
On the issue of downstate casinos, Addabbo worries that the Gaming Commission will waste six months on an unnecessary process of requesting information. He already knows from meetings of his committee that two racinos – MGM Empire City and Resorts World – want full casino licenses.
“There’s no need for an RFI,” Addabbo said. “I can tell you now, believe me, there’s an interest. They can bypass the RFI.”
Alternative New York sports betting option advances
Earlier in the morning, the Senate Racing, Gaming and Wagering Committee advanced S 1183, an alternate mobile sports betting plan to that of the governor. It referred the bill to the Senate Finance Committee.
The legislative proposal creates a more robust and inclusive online sports betting market in New York. It permits each casino and tribe to have two online skins. That means up to 14 mobile sports betting operators to start.
Twelve months after the bill goes into effect, casinos may enter affiliate agreements with stadiums, arenas, racetracks and off-track betting parlors to place online sports betting kiosks at those facilities.
“This is a really good bill,” Addabbo said in the committee. “Unfortunately, at this point, it differs a little bit with the governor’s intention. But again we are hopeful that we can negotiate a successful mobile sports betting practice and scheme in our state.”
Pretlow intends to move the Assembly version of the same bill through the Assembly Racing and Wagering Committee on Wednesday.
The lawmakers hope the bill will serve as a legislative starting point for budget negotiations with the governor as they relate to online sports betting.
What’s next for New York online sports betting
The release of the governor’s executive budget proposal begins budget season in New York.
Over the next couple of months, Senate and Assembly finance committees will analyze the governor’s proposal.
By mid-March, each chamber will come out with its own one-house budget outlining priorities. The Assembly, Senate and executive branch will negotiate the details of the final budget. They must complete the budget by April 1, the start of the next fiscal year.
These March discussions will determine the future of online sports betting in New York.