Contents
In 2016, the state legalized daily fantasy sports. In 2017, two identical bills seeking to legalize sports betting were introduced to the state Senate and Assembly.
Plus, a third bill with the same aim has been promised to be introduced to the Assembly as well.
New York legislators consider legal sports betting
In January 2017, Sen. Tony Avella introduced a bill to the Senate which would legalize gambling in the state of New York on professional and college sporting events. A month later, an identical piece of legislation was introduced in the Assembly. The bills require proceeds be applied exclusively to education.
Essentially, the bills outline a plan to allow racetracks, casinos, and off-track betting parlors to offer sports wagering through a constitutional amendment. Such a constitutional amendment would have to pass both the Assembly and Senate twice.
The second time would have to be after the 2018 election. The measure would then have to get voter approval through a public referendum.
Now that the Supreme Court ruled the federal ban on sports betting unconstitutional, there is all the more reason for New York to act quickly. Both Pennsylvania and New Jersey had laws in place to allow sports betting if the federal law changed. In other words, New York is currently playing from behind these two neighboring states.
The current legal climate for sports betting
In 1992, the federal government passed the Professional and Amateur Sports Protection Act (PASPA). This essentially made Nevada the only state allowed to offer legal sports betting.
American Gaming Association President and CEO Geoff Freeman calls it a failed law and is pushing for its repeal. Freeman and the AGA say the billions of dollars Americans are betting on sports annually shows the public wants PASPA removed and a legal and regulated sports betting market opened up in its place.
New Jersey’s challenge of the law went all the way to the Supreme Court. On May 14, 2018, the court ruled 7-2 that PASPA was unconstitutional, striking down the law in its entirety.
Another New York sports betting bill on the way
In the meantime, the New York Assembly’s Committee on Racing and Wagering Chairman J. Gary Pretlow has made public statements indicating an interest in challenging the federal law. He also said he plans to introduce a separate bill to the Assembly that would seek to legalize and regulate sports betting in New York.
Pretlow has expressed a desire to control, tax, and regulate what he says is already a billion dollar industry operating illegally.
Pretlow’s plan would be to allow sports betting at the newly opened NY commercial casinos, mainly because these gaming properties have already gone through the lengthy constitutional amendment process.
While there was still no bill as of January 2018, the committee did hold a hearing about the subject on Jan. 24. Representatives from the professional sports leagues including the NBA.
The NBA is reticent to approach a state-by-state legalization of sports betting. The league prefers federal regulation. However, it claims to be willing to consider a state approach, so long as it includes certain concessions. One such concession is paying leagues one percent of the handle to help ensure integrity within the games.
Some lawmakers suggest there is no need to rush the issue, but with several other states considering similar legislation or passing bills, NY ought to consider the potential losses that would come with not being one of the first to market.
A more than $9 billion market
The American Gaming Association estimates Americans bet $154 billion on sports in 2016. It also claims nearly all of it was wagered through illegal bookies and offshore websites.
Broken down by population numbers, that would mean New York state’s population of approximately 19.75 million people bet an estimated $9.38 billion on sports in 2016.
Daily fantasy sports in New York
Daily fantasy sports is legal and regulated in New York. On Aug. 3, 2016, the state enacted a law that allows DFS sites to serve the New York population.
A 2017 New York State Gaming Commission report showed DFS operators generated $18,621,700 in gross gaming revenue in New York from September 2016 through January 2017. That represents an average of $3,724,340 every month since the law was enacted.
The state collected 15 percent, or a total of $2,796,182, in taxes from DFS operators during that period.
Extrapolated estimates would put annual DFS revenues in New York at $44.6 million per year with taxes at $6.7 million.
What would a legal sports betting market in New York look like?
In 2013, New York voters supported a constitutional amendment authorizing the issuance of commercial gaming licenses throughout the state. The state granted licenses to three different projects a year later.
A fourth commercial casino license was granted to Tioga Downs in Nichols, NY later that year. In December 2016, the new Tioga Downs Casino opened, becoming the state’s first commercial casino property.
The del Lago Resort & Casino in Waterloo, NY and Rivers Casino and Resort in Schenectady, NY both opened in February 2017. The Montreign Resort and Casino in the Catskill Mountains is expected to open under the Resorts World brand in the summer of 2018.
Presumably, the sports betting market in New York would start with these commercial casino properties. The state could also extend sports betting to include any of the gaming operations on the list of casinos, racinos, racetracks and Native American gaming operations in New York.
New York may also permit other off-track betting operations to offer sports wagering.
Image credit: spatuletail / Shutterstock.com