Assemb. Pretlow: NY Online Sports Betting Expansion A Long Shot As Budget Deadline Nears

Written By Mike Mazzeo on March 31, 2022 - Last Updated on April 26, 2022

It’ll probably be downstate casino licenses or nothing as it pertains to the New York gaming front.

Assemb. Gary Pretlow confirmed that online sports betting expansion/minority inclusion is a long shot at this point.

The final state budget carries a Friday due date. But it appears as though it could extend into early next week due to the most significant budget issue currently under negotiation: criminal justice/bail reform.

Pretlow had introduced a bill that would effectively lower the 51% tax rate for online sportsbooks in NY by adding additional skins over the next two years. The bill called for the Empire State to go from nine NY sportsbooks to no fewer than 14 by Jan. 31, 2023 (which would lower the tax rate from 51% to 35%) and no fewer than 16 by Jan. 31, 2024 (which would lower the tax rate from 35% to 25%).

“Yes (it’s a long shot) because the Senate — and the governor, actually — is insisting on maintaining the 51% (tax rate),” Pretlow told PlayNY Thursday.

“What I was looking to do was increase the number of skins and use the (tax) matrix that was originally done (by the NYS Gaming Association) and lower the tax rate for everybody. But the senate (one-house budget proposal) said they didn’t mind increasing the number of skins but they wanted to keep the tax rate at 51%. And the governor wants to keep the 51% so we’ll live to fight another day.”

NY sports betting expansion legislation could still emerge

While operators have fumed over the 51% tax rate — which could hurt their chances of becoming profitable in the long-term — the state has raked in $153.3 million in tax revenue from the Jan. 8 launch through March 20. And the state’s position has essentially been: “You knew what you signed up for.”

Over the last seven weeks, FanDuel, DraftKings, Caesars and BetMGM have accounted for 93.6% of the market share. Eight NY betting apps are up and running, with Bally Bet expected to launch in the first half of this year.

Local policymakers could try to move the online sports betting expansion through during the post-budget session, which runs until June 2.

“Hopefully we can have something out by June,” Pretlow said.

An expansion would give operators not selected in the first round of bidding — like Fanatics, Penn National/Barstool Sports and Bet365 — another crack at getting into the NY market. But those operators presumably wouldn’t want to come in at 51% while facing daunting competition.

Read More: Post-Budget Legislative Session Starts With Online Casino, Expanded Sports Betting Proposals

Focus remains on downstate NY casinos

Like counterpart Sen. Joe Addabbo, Pretlow is cautiously optimistic that the three downstate casino licenses will be included in the final budget.

“I think they’re moving,” Pretlow said. “It could fall apart at any minute, but we’re moving in the right direction I believe. The Devil’s in the details, and hopefully it does come to fruition that we do the acceleration.”

Mayor Eric Adams said Thursday he’d like to see two of the three downstate casino licenses go to New York City. At issue is siting and local control, with the possibility of an oversight committee being implemented.

“If the sticking point becomes the oversight of the location board — the number of members, how many votes to accept the location — we didn’t spell all of that out,” Pretlow said. “We just talked about what local control should look like. Now they have to decide does one person kill it or does a majority.”

Added Pretlow: “I’m looking at maybe 70-30 in favor (of the downstate licenses). That’s what I’m looking at. But they’re still talking, and we’re getting down to the wire. This is where things just drop off or move. And since it’s still not off the table, I’m saying it has a better chance than not of going through.”

Photo by AP / Hans Pennink
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Mike Mazzeo

Mike Mazzeo is a contributing writer for PlayNY, reporting on legal sports betting in New York while covering the potential legalization of NY online casinos and poker. He previously wrote for ESPN, the New York Daily News and The Ringer, among others.

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