New York Approves Limited-Operator Sports Betting Plan

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New York has finally reached an agreement over the state budget that would legalize mobile sports betting in the state for the first time. The $212 billion budget for 2022, announced late last Tuesday, includes a limited-operator plan backed by Gov. Andrew Cuomo. The framework includes a monopolized market, with the New York State Gaming Commission taking requests for applications (RFP). The Democratic governor has repeatedly backed a state-run model since January. He reiterated his sports betting model on Monday while talking to reporters: “We’ll contract with them, and we’ll make money. We don’t need the casinos as a middleman.”

The Empire State would become the most populous state to legalize online sports betting. According to the governor’s prediction, his limited operator model will generate more than $500 million in annual revenue for the state. Once fully mature, New York mobile betting will contribute $5 million to youth sports and $6 million to combat problem gambling annually. The rest of the sports betting proceeds will go towards education.

Details of the ‘Final Agreement’

A press release from the governor’s office gives some insight into the New York mobile betting framework. The New York Lottery will issue an RFP and then will select at least two mobile betting operators. Each platform will then subcontract out licenses (skins) to four operators. The mobile sportsbook operators would be required to give 50% to 55% of their revenues back to the state, according to the information provided Tuesday afternoon by Sen. Joseph Addabbo and Assemblyman Gary Pretlow. The lawmakers further said that the platform providers will be required to pay a one-time fee of $25 million.

Addabbo said the work starts when the budget ends. He said that the New York Gaming Commission would work on follow-up regulatory measures. The expected launch for online sports betting could be September, ahead of the 2021 football season. However, even those lawmakers who have been pushing for online betting for years are not sure how the online sports betting framework would eventually translate into reality.

A Disappointing and Confusing Framework

The Cuomo-led sports betting framework raised more issues than it solved. It’s a blow to a competitive sports betting industry sought by not only Sen. Addabbo and Assemblyman Pretlow but the entire legislature. In January, both lawmakers backed a competitive model, proposing a bill that would allow New York’s commercial casinos to pair with two mobile skins each. The competitive model was backed by the Assembly and the Senate in their budget proposals last month.

Governor’s duopolistic model also raises concerns for the gaming market in general and the Oneida Indian Nation in particular. The central New York tribe objected to Cuomo’s plan last week after learning it could be excluded from mobile sports betting. The tribe warned it the “violation” could cost the state nearly $70 million in annual payments from tribal slot revenue. On Monday, Cuomo and his financial director Mujica sought to dispel the Oneida tribe’s concern and confirmed that the state plans to include the tribe in online betting. However, the negotiations have not moved an inch since.

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