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New York is stuck in a holding pattern around sports betting, but that’s not keeping its casinos from filing into position.
On Wednesday, Empire Resorts announced a “strategic alliance” with a subsidiary of bet365 to offer sports betting and online gambling for a period of 20 years. Empire owns Resorts World Catskills, a $1.2 billion commercial casino venture in Monticello which opened early this year.
Bet365 is a European heavyweight that bills itself as the world’s largest online sports betting operator. And it seems to have growing ambitions in the US. This partnership is its second stateside, following an alliance with Hard Rock Atlantic City announced in July.
Empire’s stock was up more than 35 percent following the announcement.
While the bet365 deal with Hard Rock is a straight branding agreement, this partnership with Empire is broader in scope.
Under the terms, bet365 will power both the retail sportsbook on property as well as a statewide online/mobile sports betting platform. The deal also covers online gambling, though that vertical appears to have a longer road to legalization in New York. While iGaming bills have been on the table for years, the focus has shifted to sports betting in recent months.
Here’s the property’s executive chairman, Manny Pearlman on the deal:
“Bet365’s global expertise in effectively developing and executing world-class sportsbooks strongly complements Empire’s leadership in commercial casino operations in New York. This collaboration, which will enable Resorts World Catskills to be a leading destination for sports wagering in New York State, highlights our commitment to the continued growth of Resorts World Catskills, as well as our dedication to working with the best, most innovative pioneers in the industry to provide world-class gaming options.”
The announcement sheds more light into the financials than most, including a disclosure that the two groups will split the profits right down the middle. Bet365 will also invest up to $50 million to become Empire Resorts’ second-largest shareholder, paying a premium to do so.
You can read the full press release here.
Sports betting is legal in NY at the four commercial casinos, thanks to a voter referendum from 2013. While that measure primarily moved to expand the casino landscape, it also included express authorization for sports betting. It passed with ease.
In the time since the US Supreme Court decision in May, each of the four casinos has secured a sports betting partner:
That being said, the launch of NY sports betting is not imminent. The existing law directs regulators to promulgate rules for the industry, but there appears to be no urgency within the NYS Gaming Commission.
The agency did offer a short update in the weeks following SCOTUS which remains its most recent public comment to date:
“Commission staff has long been working on regulations that would effectuate sports gambling under the existing statutory language. Staff anticipates being able to provide a draft for your review in the near term.”
The definition of “near term” is open to interpretation in New York, and it apparently means more than six months. The consensus seems to be that more legislation is needed to satisfy all stakeholders, including the state’s tribal gaming operators.
Meanwhile, all four commercial casinos are struggling to stay afloat financially. Del Lago has asked the state for help on at least two occasions, and Resorts World has lost tens of millions of dollars since opening. While sports betting isn’t a cure-all for revenue concerns, operators could use any help they can get.
Gaming consultancy Eilers & Krejcik projects the NY market will be the biggest in the country, with annual revenue of $1 billion within five years of legalization.