There has been a lot of optimism surrounding New York being able to launch legalized online sports betting by Super Bowl LVI on Feb. 13, 2022.
But some industry experts aren’t so convinced that NY sportsbook apps will be here that quickly.
The process is currently in the hands of the NY State Gaming Commission, which has until before Dec. 6 to select winning applicants. Licenses would then be presented at the NYSGC’s next meeting.
“I think it’s incredibly ambitious,” lawyer and lobbyist Bill Pascrell III told PlayNY from the Gaming Law, Compliance and Integrity Program Bootcamp at Seton Hall Law School in Newark, NJ.
“You’re going to be having a decision on licensees, then you’ve got to test the technology, go through regulatory compliance, it’s next to impossible. But perhaps they’ll be able to do it.
“What I think they should do is take a deep breath, because there’s nothing worse than rushing to market with a really bad product, something that’s not going to do well and blow up, compliance issues, Geolocation, AML, age-verification, all that. I think what they should do is probably start to target maybe March Madness. That’s a much better offer than just one (NFL) game.”
NY’s Process To Launch Still Very Complicated
Martin Lycka, SVP for American Regulatory Affairs and Responsible Gambling at Entain, readily acknowledged that he has a vested interest in the process going as quickly as possible.
Entain is a 50% owner of the digital division of MGM Resorts International and BetMGM Sportsbook in the US. BetMGM is part of a Super Bid with FanDuel Sportsbook, DraftKings Sportsbook and Ballys that is considered a favorite in the NY bidding process.
Still, Lycka agreed that Super Bowl XLI isn’t necessarily a sure bet.
“Of course, we’re hopeful (for Feb. 13, 2022), but it usually takes longer than a couple months to put it all together,” the UK-based Lycka told PlayNY.
“And by all I mean design of a product that is compliant with all the applicable regulations from all sorts of perspectives: technological, responsible gambling, consumer protections, permitted portfolio of products. Then it needs to be tested. And then, and only then, can it go live. And of course, in the meantime, the regulator needs to get ready to welcome the new market and make sure they can launch into a safe environment.
“But as part of that environment they also need to ensure that customers are protected. Because as soon as operators launch they start engaging with customers, and it’s usually a minority of customers because operators know what they are doing, but there are bound to be customers that will be raising issues with individual operators. So I would not underestimate the practical aspects of the launch and regulatory compliance with the new regulatory regime throughout its lifecycle.”
Pascrell stressed that potentially not meeting the Super Bowl LVI goal was by no means a criticism of NY State Senator Joe Addabbo and assemblyman Gary Pretlow, two massive advocates of online sports betting in the state.
“I have a tremendous amount of respect for them,” he said. “I just think for the regulators, this is the first time they’re doing this and they’re learning. So I’m concerned about a rush to market and launch with a regulatory body that this is very new for.”
Pascrell preferred not to speculate about what lawsuits could potentially manifest before launch. “You could potentially see some litigation coming from racetracks. I just don’t think New York is that attractive because of the tax. I think the biggest mistake in New York is they should’ve allowed for an open market.”
Legal Experts Say NY Should’ve Followed NJ Plan
New Jersey has been extremely successful with an open competition and a 13.5% tax rate on online sports betting. New York lawmakers wanted to go in that direction, but former Gov. Andrew Cuomo’s administration decided on a closed process with a tax rate that could be more than 50%. Pretlow has described it as the difference between “heaven and hell.”
“I would agree that every single state in the country would be advised to use the New Jersey regulation as a starting point, and then of course embed it in their own legislative and constitutional framework,” Lycka said.
Regardless, things could look a lot different in the future.
“New York is not going to look anything in two years what it looks like now,” Pascrell said. “It’s going to be an evolving business.”
But as far as a Feb. 13 launch is concerned, the legal experts say pump the brakes.
“It doesn’t seem humanly possible in light of all else that’s going on, but stranger things have happened,” Pascrell said. “When regulators are motivated, sometimes they can achieve miracles. I hope they’re successful. More importantly than anything else, it needs to be successful, fault-proof and have compliance integrity. And rushing to market can only compromise those things.”
