Two New York lawmakers filed companion bills on Thursday to legalize online sports betting days after Cuomo announced he now supported the industry. However, the proposed legislation presented an entirely different approach from what the governor had proposed.
Last Tuesday, Gov. Andrew Cuomo said he is finally ready to see regulated online sports betting, the stance he had opposed until now. Following this announcement, Sen. Joe Addabbo and Assemblyman Gary Pretlow filed their 2021 New York online sports betting bill similar to their previous legislative attempt to legalize the digital industry in the Empire State. The bill seeks two skins per licensee instead of one each, which are meant to make a more robust market in terms of handle. However, that would decrease tax revenue well short of what Gov. Cuomo expects from a lottery-style monopoly.
New York Sports Betting Bill Details
Under Senate Bill S1183 filed by Sen. Addabbo, New York’s four commercial casinos can partner with two online sportsbook operators each. The three tribal casinos are also allowed to participate via an opt-in clause, allowing for up to 14 online operators to enter the state.
Those online sportsbooks approved to offer New York mobile betting would have to pay a one-time $12 million license fee. Gross revenues from digital betting would be levied at 12% while betting at land-based sportsbooks would be taxed at 8.5%, a 1.5% decrease from the existing fee of 10%. State Assemblyman Gary Pretlow filed a companion bill in the Assembly.
This is not Addabbo’s first effort to see mobile sports betting in New York. He has tried several times to bring about similar legislation. The Assembly never took up a 2019 bill passed by the Senate by a 57-5 majority. Also, many details in the jointly-filed S1183 and A1257 are almost the same as the 2019-20 of Addabbo and Pretlow’s bill. This new bill appears to face a similar fate to his prior attempts, as the bill summary estimates $79 million in annual state revenues based on conservative market analysis, which is not good enough for Gov. Cuomo.
How Much is Good Enough for Cuomo?
The Democratic Governor only changed his stance on mobile sports betting recently during the Q&A part of his coronavirus press conference, and it seems that Gov. Cuomo has far bigger expectations from his new-found love for online sports betting. Cuomo said he wants to do sports betting through a lottery, where the state gets the revenues instead of allowing casinos to run their gambling operations. He said that allowing casinos would spare “minimal money for the state”.
According to Budget Director Robert Mujica, the standard sports betting model such as the one proposed by Addabbo could bring roughly $50 million in annual tax revenue, but a single-operator monopoly could draw as much as $500 million annually. However, further analysis suggests that New York sports betting market would have to take $20 billion in yearly bets to hit the $500 million mark. It is not entirely impossible, but it won’t be achievable in its first year.
New York Could Be a Huge Sports Betting Market!
Despite the huge difference between Cuomo and the two lawmakers’ approach toward the process, New York has the potential to become the top sports betting market in the US once the online industry is launched. Currently, neighboring New Jersey claims the leadership role in US sports betting, yet as much as 25% of this is owed to New Yorkers who visit New Jersey to place legal online bets. According to a Fantini Research official, with a population of 20 million, the New York market could generate revenues of up to $1 billion.
However, Cuomo’s monopolization of the Empire State’s online sports betting market could impact the industry analysis to uncertain levels. Perhaps, the ambitious governor wants to fill a $30 billion budget deficit dented by the pandemic with a single industry.