New York Governor Andrew Cuomo is planning to legalize mobile sports betting in the state, the details of which will be laid out in his State of the State address next week. The proposal could pave the way for the Empire State to become the largest sports betting market in the country.
Dealing with COVID-19’s Financial Impact
New York’s finances have greatly suffered because of the ongoing coronavirus pandemic. In fact, the state is currently facing a massive budget deficit which is estimated to go as high as $75 billion. For this reason, the state needs to maximize its tax revenues so it could recover from the devastating economic impact of the crisis, and an online sports betting market can help big time.
Cuomo, over the years, has done little to push for the legalization of mobile sports wagering in the Empire State. But that has now changed as the governor is now fully on board with the idea, giving high hopes to plenty of New Yorkers who have long been waiting and wanting to place online wagers without leaving the state.
NY Could Become Largest Sports Betting Market in US
New York is among the Top 5 most populous states in the United States. Sports is ingrained in its culture, with the state having a number of professional teams across various sports. It is also home to some of the most popular sports stadiums and arenas. The state has the potential to become the leading sports betting market in the US, and that’s if it adds a mobile offering.
Retail sportsbooks are currently in operation in the New York, at a number of commercial and tribal casinos, including Resorts World Catskills and Rivers Casino Schenectady. But the industry hasn’t been a huge contributor to the state, as far as revenues are concerned, with monthly revenue struggling to reach $3 million.
If mobile sports betting is finally allowed to operate, the NY sports betting handle could go as high as $1 billion a month, according to Sara Slane, a sports wagering consultant. This tops current sports beating leader New Jersey which took $931.6 million in bets in November, a new record high for the state.
Interestingly, a recent industry survey has found that New Yorkers represent around 20% of New Jersey’s sports betting revenue. The lack of mobile offering in New York pushes its residents to go elsewhere to place online wagers, while some are also forced to join black markets. Clearly, New York is losing to its neighboring states in terms of sports betting revenue when it can obviously become a leader in the market.
Lottery Model
While Cuomo’s proposal was generally welcomed as positive news, his decision to adopt a lottery model in running the state’s online sports betting market has raised some eyebrows.
As part of Cuomo’s proposal, the New York Gaming Commission will select a sole sports betting platform to offer mobile wagering, and it must operate in partnership with a licensed commercial casino.
With only one sports betting operator allowed to run, there would be less competition, and some see this as a major downside especially in terms of coming up with innovation and reasonable pricing for consumers.
Matt King, CEO of FanDuel Group welcomed Governor Cuomo’s plan to legalize mobile sports wagering, but also stressed that a model with competition among operators plays a crucial role in consumer choice and maximizing state revenue.
Gaming experts also noted that Cuomo’s lottery model proposal would go against the state’s constitution.
A lot of operators would want to partner with casinos, as is the case in other states, but Cuomo wants to make his position clear – revenue should go to the state and not the casinos.
According to State Budget Director Robert Mujica, if online sports betting is operated via casinos, the state would only get around $50 million annually. Under Cuomo’s lottery model proposal, New York could enjoy an estimated $500 million in revenue each year.