When is a market access deal not really a market access deal? When there is no market to access.
That could end up being the case for Penn National Gaming in New York.
In order for the partnership with Rivers Casino & Resort Schenectady to have any real relevance, the law in the Empire State needs to significantly change. Additionally, that change will have to take a very specific form.
Details of the Penn National deal with Rivers
However, it’s not that simple. As any gambler in New York knows, online gaming remains illegal within the state’s borders. There is momentum to change that in regards to online sports betting, but there is a lot still up in the air about that.
That includes whether Penn National and Rivers will ever actually be able to implement this cooperative effort. There’s actually a strong chance that may never be the case.
Drastic changes needed to NY gambling law
Penn National and Rivers not only need New York to legalize online gambling but also do so in a way that would change the status quo drastically. Essentially, this partnership requires a legal landscape similar to that which exists in neighboring New Jersey.
There, brick-and-mortar casinos can acquire licenses that come with multiple online “skins.” Those amount to contracts casinos can delve out to online gambling companies to operate in the Garden State under the casinos’ licenses.
In order for this agreement to accomplish its intended goal, New York would need to put something similar in place. Rivers would need at least two skins, as it maintains its own online gambling brand, BetRivers.
Changing the law in that way runs contrary to the wishes of Gov. Andrew Cuomo, however. The necessary path also differs from what some members of the state assembly prefer.
Roadblocks in Albany could stifle this partnership
Cuomo’s proposal for gambling expansion includes online sports betting but excludes online casino and/or poker. On the sportsbook side, it essentially sets up a state-sanctioned “monopoly.”
Cuomo’s plan would set up legal online sports betting to run much as it does in nearby New Hampshire. There, the NH Lottery has a contract with DraftKings to provide the entertainment.
So the only way to place legal online wagers in New Hampshire is to bet with DraftKings. Cuomo wants a similar framework, with the New York Lottery being the sole license holder.
Members of the state legislature prefer a more competitive marketplace, but perhaps not that much more competitive. A bill to authorize online sports betting last year that passed through the Senate only allowed for one online skin.
Penn National banking on New York potential
Penn National understands the necessity of only the right legislation for its interests moving forward.
“Gaining potential access to what could become one of the nation’s most lucrative sports betting markets has been a major priority for our Company,” said Jon Kaplowitz, Penn National’s senior vice president of interactive gaming.
“We are hopeful that the New York State Assembly will follow those leading revenue-producing states that allow for multiple skins for mobile sports betting. A state the size of New York certainly warrants open competition and a free-market approach.”
If Cuomo or legislators favoring a single-skin system get their way, this deal with Rivers doesn’t amount to much for Penn National. Thus, the stakes for gambling expansion legislation in Albany just got higher.