Sports betting is a no-go in New York.
The General Assembly adjourned Wednesday night, leaving piles of unfinished business on the table. Active NY sports betting bills failed to reach a vote in either chamber.
Lawmakers had been working to broaden the 2013 act that authorized sports betting at the four commercial NY casinos. The state’s race tracks and off-track betting facilities seek inclusion, and tribal nations are pushing to have their voices heard, too.
Barring a special session, however, a new law won’t be in place until at least 2019. Regulators now have to decide whether or not to move forward with what limited pieces they have.
NY sports betting runs out of steam
If we’d been handicapping states a few months ago, NY would have been among the favorites to pass a new sports betting law. Committees dug deep early in the year, and key lawmakers had the wind at their backs throughout the spring.
The most diligent efforts originated with the chairs of the gaming committee in each chamber.
Sen. John Bonacic led the push, leaking a draft bill in February and introducing it in March. A couple of months later, Assm. Gary Pretlow introduced his own into the lower chamber. The US Supreme Court decision in May sparked some fresh urgency in the statehouse.
Optimism grew as Bonacic and Pretlow modified their bills to match each other in June. Making the bills “same-as” versions seemed to be a precursor to expedited passage. Then the bills were amended together again during the final days, another indication of progress behind the scenes.
It was much ado about nothing, though. Neither chamber reached a vote. The clock expired on Wednesday night, and lawmakers departed Albany with sports betting unresolved.
Close but no cigar for Pretlow, Bonacic
For all that momentum, there was never a clear sense that sports betting would get over the hump.
The primary resistance came straight from Gov. Andrew Cuomo. The governor urged a methodical approach to legislation, and he proclaimed the efforts dead very early on. Here’s what Cuomo told capitol reporters in mid-May:
We’ll do an economic analysis and a legal analysis, but nothing’s going to happen this year because there’s literally just a number of days left in the legislative session and this would be a very big issue to tackle.
More than a month still remained in the session at that point, but alas. That is “a number of days” by definition. A spokesman for Assembly Speaker Carl Heastie indicated that Democratic members of the lower chamber had also raised “significant issues.”
By June, the bills were “on life support” according to a source for Legal Sports Report.
The Oneida Indian Nation expressed opposition, too. Although the nation has an appetite for sports betting at its three NY properties, it rejected the proposed framework. NY lawmakers employ extra caution when navigating gambling issues that could affect the tribal-state relationship.
To make a long story short, there simply wasn’t enough support to get sports betting onto the floor this session.
A big loss for MLB, NBA
The death of NY sports betting bills could be seen as a big loss for the NBA and Major League Baseball, too.
The two professional sports leagues spearheaded a lobbying effort at the state level, pushing lawmakers to adopt their preferred model for legislation. New York became the frontier in a months-long campaign through statehouses across the country.
At a February hearing in Albany, the NBA offered support for state regulation for the very first time. It supports states, that is, provided they follow the league’s proposed framework. That includes the payment of integrity fees, a controversial inclusion in the eyes of lawmakers and operators alike.
While most states pushed back against league influence, however, NY lawmakers turned a listening ear.
“I do think they deserve something because they produce the product,” Pretlow told ESPN. “It’s better for me to have the support of the leagues rather than have them fighting me.”
Bonacic included a modified integrity fee in his bill — a quarter of a percent of every bet instead of the requested one percent. Pretlow introduced his bill with the same fee, though he called it a “royalty fee”. The Senate bill adopted the same language by amendment, and that “other” amendment reduced the rate to a fifth of a percent across both.
It wasn’t what the leagues asked for back in February, but it would have been something. It would have been more than they’re receiving in any other state, that’s for sure. No existing sports betting law in any state includes integrity fees.
The NBA and MLB were banking on NY lawmakers to help them set a new, more favorable precedent in other states.
Better luck next year?
By the time the legislature reconvenes, at least two (and possibly three) neighboring states will be generating tax revenue from sports betting.
New Jersey sports betting went live in June, and plenty of New Yorkers are slipping across the border to place bets. Pennsylvania will launch later this year, and Connecticut lawmakers are considering a special session to revisit the topic this summer. Non-neighboring West Virginia, Mississippi, and Rhode Island are also poised to launch sports betting this year.
But not New York. Its only immediate path forward would involve a special session, which appears unlikely. So how about next year?
Prospects might be slightly better. For starters, MGM just purchased the Empire City Casino in Yonkers, looking to establish itself in the NY market. The group’s appetite for (and experience in) sports betting may help move the needle a bit. The ongoing financial struggles of the upstate casinos add four more logs to that fire.
The recess also gives stakeholders some time to get on the same page, maybe revisiting tribal compacts or continuing the negotiations with sports leagues. It’s possible they all come back next year prepared to move forward together.
Pencil NY sports betting down as small favorite for 2019.