With Key Deadline In Rearview, NY Faces Challenges In Legalizing Online Betting

Posted on August 6, 2020 - Last Updated on August 24, 2020

The deadline for a potential New York sports betting amendment to the state’s constitution that would authorize online wagering has passed for another year. That leaves legislators in Albany with a “Sophie’s choice.”

The options are to try again next year or try for a more uncertain path now. There are advantages and, unfortunately, disadvantages, to either choice.

What happened to the push for NY sports betting amendment?

Earlier this year, legislators again pushed for such a proposal. Currently, the NY Constitution only grants the privilege of offering sports betting to commercial and tribal casinos, and only on an in-person basis.

The process of amending the constitution to change that is intentionally arduous. Not only do such proposals require supermajority approval in both chambers of the state legislature, but are also subject to a voter referendum as well.

That process, obviously, takes time. Unfortunately, the deadline to get an amendment through the legislature in time for a popular vote in 2021 is already gone.

Now, the earliest a statewide vote could happen is 2023. Even if voters approved the measure, it would likely take months more to draft regulations, issue licenses, and actually get online sportsbooks up and running.

That would mean nearly four more years of New Yorkers crossing state lines to make bets online in places like New Jersey and Pennsylvania. By that time Connecticut, Massachusetts and Vermont may all have legalized online wagering as well.

For that reason, New York legislators are willing to risk a more treacherous path. Although the payoff may be more immediate, the road is far from clear.

“Plan B” and why it may not work

Another strategy is for the legislature to simply legalize online wagering with an act. That’s something the body could do quickly, and set to take effect immediately.

There is some precedent in the state for expanding gambling that way. Late in 2016, the state enacted the Interactive Fantasy Sports Act.

That gave daily fantasy sports operators leave to accept paid entries from New Yorkers. That is ongoing right now, but not without some trouble.

Almost immediately after the act took effect, a lawsuit challenged its legitimacy. That dispute is still ongoing and has the potential to shut down DFS in New York.

It’s possible that legalizing online wagering with an act could meet a similar end. However, that seems unlikely right now. That’s because one key figure who would need to approve such an act isn’t on board with the strategy.

Cuomo’s insistence may lead to resistance

New York Gov. Andrew Cuomo has been consistent in his stance that any gambling expansion requires a constitutional amendment. If he sticks to his guns on that point, he might veto any act to legalize online wagering that reaches his desk.

He has been clear that he would support an amendment proposal to that end, so waiting for 2023 has the advantage of removing that obstacle. Legislators hoping to sway Cuomo their way still have a card left to play.

The state faces an estimated budget shortfall of over $13 billion for the next fiscal year. While online sports betting wouldn’t fix that problem entirely, it could be of great aid.

Legislators will soon get some insight into whether the budget shortfall has made Cuomo more receptive to their plans. His revised budget is due shortly, and whether or not he includes any revenue from online sports betting taxes will be the “tell” they are looking for.

If Cuomo indicates some flexibility, that might prompt the legislature to move on the issue. Right now, however, the best-case scenario looks like a ballot measure in 2023.

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Derek Helling

Derek Helling is a freelance journalist who resides in Kansas City, Mo. He is a 2013 graduate of the University of Iowa and covers the intersections of sports with business and the law.

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