New York Legislators May Soon Take Action On Online Sports Betting

Posted on July 17, 2020

No longer content to lose thousands of dollars in potential tax revenue to New Jersey and Pennsylvania, a special legislative session may tackle the question of online sports betting in New York. Many facets of the situation are still up in the air.

Among those are how much support exists among New York legislators for amending the state’s constitution to allow for such wagering. What’s clear, however, is the state’s need for new revenue.

Handicapping the prospect of a special legislative session

There is some level of support for such a move in both chambers of the legislature. Assembly Speaker Carl Heastie has begun polling members on their support for an amendment.

If Heastie feels he can drum up the necessary support, the New York Senate may be inclined to go along. That body has authorized prior initiatives to legalize online wagering without an amendment.

The hesitation on some assembly members’ part, and that of Gov. Andrew Cuomo, has been on the route of legalization. Cuomo has especially been obstinate in saying that an amendment is necessary.

The reason behind attempts at legalizing online wagering with an adjustment to the state code, instead of an amendment, has been the timeline. The process of amending the state’s constitution is intentionally arduous and lengthy.

To do so, the legislature must pass identical proposals in two separate sessions. At that point, the proposal faces a referendum of the state’s registered voters.

Thus, the possible special session that may happen soon would only be the first step. It could set the stage for a discussion on the greater expansion of legal gambling in the state as well.

In-stadium wagering, daily fantasy sports, and online casinos

Earlier proposals to expand legal sports betting in New York have included allowing sporting venues, like Yankees Stadium, to offer retail wagering. Whether that will be part of an amendment proposal is uncertain.

That would give the amendment powerful allies in the state, in the form of professional sports franchises. If the push to amend the constitution goes forward, it may need that aid.

Commercial and tribal casinos in the state currently enjoy a “monopoly” on legal wagering in New York. They might oppose any attempt to weaken that, even if the framework would cut them in by requiring online operators to partner with them.

The power of those corporations is already apparent. Rivers Casino joined a lawsuit to invalidate a law allowing daily fantasy sports contests in Iowa, which is currently on appeal.

If ultimately successful, that lawsuit could necessitate the inclusion of DFS in a constitutional amendment. The New York legislature could address that need in this session as well, drafting language that would explicitly authorize DFS games and online sports betting.

The same could go for online casino platforms. If the goal of expanding legal gambling is to capture new revenue, that’s the true “cash cow.”

New York’s need for cash and why iGaming is an ideal solution

As divided as NY legislators may be about expanding gambling, there’s a consensus on the state’s need for new revenue. Tax receipts going toward the state coffers were down over $1.5 billion in June year-over-year.

Naturally, an amendment proposal, even if ultimately successful, wouldn’t supply immediate cash. The most optimistic timeline for ratification is the fall of 2022, with an actual launch probably happening in mid-to-late 2023.

A positive movement toward that end might help New York secure funding now, however.  In terms of producing tax dollars, online casino is the best available option.

An online casino player can be worth as much as seven times that of a sports bettor to an operator. Online gambling has kept New Jersey’s tax dollars flowing amid the COVID-19 pandemic, and it’s uncertain how many of those players actually make their homes in New York.

Getting the requisite legislative support for such a massive expansion of gambling at one time may prove difficult, however. For that reason, proponents may stick to online sports betting in this special session.

All those questions will be answered if the session does occur. In the meantime, New Yorkers will continue to fund the state treasuries in New Jersey and Pennsylvania when it comes to online gaming.

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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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