Long Shot Still Alive As Senate Pitches Governor On Mobile NY Sports Betting

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NY sports betting

The state legislature continues to press Gov. Andrew Cuomo to authorize mobile NY sports betting.

Amid budget negotiations, Senate lawmakers are prepared to include enabling language in their proposal to Cuomo. Voters previously approved NY sports betting for four upstate casinos, and regulators are now working to create a framework of rules.

Legal Sports Report has obtained a draft of the budget language, which includes new provisions for online wagering.

Sen. Joseph Addabbo and Assemblyman Gary Pretlow have each filed standalone proposals for such legislation this year, too.

What’s in the NY sports betting draft?

The draft borrows language from the Addabo/Pretlow bill, allowing third parties to offer online sports betting as an “agent” of any licensed NY casino.

Passage would be exceptional news for DraftKings Sportsbook and FanDuel Sportsbook, each of which have partnerships already in place.

Expanded sports betting would be a boon for MGM Resorts, too. The company spent nearly $1 billion to purchase Empire City Casino and the attached Yonkers Raceway last year, hoping for expanded forms of gambling down the road. The budget bill could eventually allow “MGM New York” to offer sports betting both on-site and throughout the state via the internet.

Licenses to operate NY sports betting would cost $15 million apiece, and revenue would be taxed at 8.5 percent. The draft retains some restrictions from the existing bill, including a prohibition against taking action on in-state college teams and events.

Another thing that stuck? The draft includes an integrity fee — a “royalty” amounting to 0.20 percent of the total betting handle. Passage of such language would be a first for US sports betting; no state law includes any fee payable to sports leagues.

All four of the major US sports leagues are headquartered in New York City.

NY constitution vs. sports betting

Like some other state constitutions, New York’s prohibits any expansion of gambling without an amendment. The referendum process is especially arduous in NY, requiring approval from two consecutive legislatures prior to a vote from residents at the ballot box.

Some NY lawmakers — Addabbo and Prelow, chiefly — believe they can bring NY sports betting online without a referendum.

The crux of the matter is whether or not online betting constitutes an “expansion of gambling” or simply a new implementation of an existing game. The sponsors have sought assurance from Attorney General Letitia James in the form of a written opinion.

Ultimately, it could be up to Cuomo and his counsel — or the courts — to determine the constitutionality of the proposal. The governor is nudging NY sports betting forward as previously approved, having issued a call to action during his State of the State speech last month.

As young US markets are demonstrating, making sports betting broadly accessible is critical to success. In New Jersey, for example, more than 80 percent of all wagers are placed online or via a mobile device.

The Cuomo administration is working to erase a budget shortfall of more than $2.3 billion for the upcoming fiscal year.

A sequel to Rhode Island sports betting?

In more ways than one, the path New York is taking toward sports betting mirrors that of Rhode Island.

RI sports betting became legal last year thanks to Gov. Gina Raimondo, who included associated revenue in her budget. Implementation was initially restricted to in-person betting at casinos, as is the case in New York.

Lawmakers in both states continue to debate whether or not online betting requires a voter referendum, and both groups are seeking a legislative workaround.

Rhode Island is nearly there, having passed an online sports betting bill earlier this week. It now awaits a signature from Raimondo.

New York is trying to keep pace, but the support of Cuomo seems less certain. Sources tell LSR that the administration is warming up to the idea, though, and the deficit could provide enough leverage to absorb mobile betting into law.

The NY budget must be in place by April 1.