New York Now Has Legal Sports Betting! Well, Sorta…

Written By Eric Ramsey on May 17, 2018
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Sports betting might be available in New York sooner than you’d think.

On Monday, the US Supreme Court removed the federal hurdle that stood in the way of state-regulated sports gambling. The court struck down the Professional and Amateur Sports Protection Act (PASPA), ruling that it commandeered states into enforcing an unwanted federal law. The prohibition had been on the books since 1992.

New York has an existing law that allows the four commercial casinos to offer sports betting. That law previously relied on a change at the federal level to become active, a condition that was met this week. Lawmakers have some more work to do in order to finalize the industry’s regulatory structure, though.

Let’s run through the immediate impact the SCOTUS ruling has on the NY gambling landscape.

Is NY sports betting legal now?

Yes… sort of.

You still can’t bet on sports. The concept is legal, but the operations aren’t until regulations are in place.

In 2013, NY voters approved an effort to bring four commercial casinos to the upstate region:

Tribes provided the state’s only full-service casino options prior to the referendum. That referendum also contained an approval for those new properties to offer sports betting, pending the change in federal law that just occurred.

So yes, there is an active law that permits sports betting on the books. However…

That law is fairly sparse in details. It tells sportsbooks who is allowed to place bets. It allows them to give action on all professional sports and most collegiate events. They have to post odds and keep records. Other than that, it’s pretty much up to the NYS Gaming Commission to fill in the blanks. Regulators had been biding their time while waiting for resolution at the federal level.

It might take more than just regulatory work though. Lawmakers and stakeholders see the law itself as incomplete in scope and implementation. More comprehensive legislation has been filed in an effort to cement the guideposts for NY sports betting.

What else does the law need?

For starters, the law probably needs to include the horse racing industry. As written, there are no provisions that would allow tracks to offer sports betting. Since it passed by inclusion in a commercial casino bill, the scope is fairly narrow. There’s no reason not to include the tracks, and a new bill from Sen. John Bonacic would do just that.

Tribal tensions present a lingering issue, too. The nations are pretty peeved about losing their monopoly on NY gambling and concerned about the potential for oversaturation. Offering sports betting without their consideration will certainly not help tribe-state relationships. Bonacic’s bill appears to keep the existing commercial limitation in place.

For that matter, a new referendum could arguably be required to allow mobile and online wagering, as the Bonacic bill would authorize. As it stands, voters must approve all forms of gambling expansion, as they did for the commercial casino project.

It’s debatable whether or not online sports betting would fall under those requirements. Mobile/online betting is one of the primary pillars for any state looking to compete with offshore options.

Lastly, most states are codifying sports betting fees and taxes into law, and those are absent from the existing NY legislation. Money is pretty important to the state, so the payment structure will likely be hammered out quickly. Bonacic proposes a reasonable tax rate of 8.5 percent on sports betting revenue.

It’s also worth noting that one of the fees included in Bonacic’s bill is the controversial integrity fee for sports leagues.

Forward progress had been a little sluggish in recent months, but the sudden change might create new urgency.

Rundown of the SCOTUS ruling

The case SCOTUS decided on Monday was called Murphy vs. NCAA. You might also hear it called the “New Jersey sports betting case.”

“Murphy” is NJ Gov. Phil Murphy, who inherited the defendant’s role in the case from his predecessor, Chris Christie.

The plaintiffs were the NCAA plus the four US sports leagues:

  • NBA
  • NFL
  • NHL
  • MLB

The US Department of Justice was also a plaintiff. It was quite a case, and it was about more than just sports betting. The ruling touched on some of the nation’s core principles of states’ rights and anti-commandeering.

New Jersey was the rebellious child that turned against PASPA. Starting with voter approval in 2011, the state tried a couple times to establish a sports betting industry. The leagues brought suit against the state, though, which they had the standing to do under PASPA.

The mighty leagues won, initially and repeatedly. Through multiple stops in Circuit and District courts, the state was told it could not offer sports betting.

SCOTUS declined to hear the case at first, but it finally granted the state one final appeal in 2017. The parties argued their sides before the justices in December, and the ruling came down on May 14, 2018.

The court ruled for NJ — and for all states — overturning lower rulings and completely repealing PASPA. States can now do as they please when it comes to sports betting, without federal interference.

NY already has some preparations in place to take advantage, but as you can tell, there’s still some work left to do.

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Eric Ramsey

A New York native, Eric Ramsey serves as a data analyst for PlayNY. He has worked with the site and the entire network of Play-branded sites since 2017. Eric began as a reporter for Legal Sports Report before becoming the managing editor for Online Poker Report. His background is rooted in the poker world, as he formerly wrote for PokerNews and the World Poker Tour. Prior to assuming the data analyst role, Eric regularly reported on the legislative process of states to legalize sports betting. By tracking hundreds of bills across the country, by listening to hours of legislative testimony, Eric has evolved into one of the leading analysts for legal sports betting and gambling in the US. His work has been cited in a number of industry, local and national publications and referenced by scholars and policymakers.

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