Cautious optimism exists that New York Gov. Andrew Cuomo could turn to mobile NY sports betting to help balance a $6 billion budget deficit.
“I am more optimistic this year than last year,” said Sen. Joseph Addabbo Jr., who sponsored the NY sports betting bill that passed the Senate last June. “I can only hope it’s in his State of the State or budget talks.
“He has to understand that you’re in a fiscal situation here and can’t cut your way out of a $6 billion deficit. A significant source of new funds is going to be needed.”
It’ll take more than sports betting in NY
Mobile NY sports betting alone isn’t going to put much of a dent in a $6 billion deficit. Including the $12 million licensing fees proposed in the bill passed by the Senate last year, sports betting could contribute in excess of $100 million to state programs.
Addabbo also advocates for issuing three casino licenses to facilities located in the New York City area, which he believes could take more than $1 billion off the deficit.
Cuomo will lay out his vision for New York on Wednesday in his State of the State address at 1:30 p.m. local time. His executive budget proposal is due Jan. 21.
Reason for optimism on NY sports betting in budget
Last year, the NY Senate included mobile New York sports betting in its state budget proposal, but the Assembly and Cuomo weren’t willing to consider it.
With a Medicaid shortfall fueling fiscal woes, they might be more open to exploring such avenues for new revenue.
The New York Post suggested legislators and the governor are wary of raising taxes or cutting spending when they are all up for re-election this year, as one might expect.
“The bottom line is we’re leaving hundreds of millions of dollars on the table and we need it now,” Addabbo said.
Even if the governor doesn’t include mobile NY sports betting in his executive budget proposal, it could be added in through negotiations with the Assembly and Senate at any point before the final budget is due April 1.
New appointee could help on the constitutionality issue
Addabbo pointed to a change in the governor’s legal counsel as another potential positive sign for mobile sports betting in New York.
The Senator stated that Cuomo’s previous legal counsel kept repeating one word when they brought up mobile sports betting: unconstitutional.
Assemblyman Gary Pretlow and Addabbo, who chair the gaming committees in the New York Legislature, argue that mobile sports betting takes place at the servers located on casino property. Therefore it would be included under a previous constitutional amendment that authorized casinos and New York sports betting.
Addabbo said Cuomo’s new legal counsel, Elizabeth Garvey, has expressed willingness to look at the constitutionality of mobile betting.
Garvey used to serve as legal counsel for NY Senate Republicans, where she worked on gaming policy with Addabbo’s committee chair predecessor, Sen. John Bonacic.
Cuomo still doubts sports betting revenue potential
One hindrance to getting Cuomo’s support for mobile sports betting is his downplaying of the revenue it could generate.
Addabbo said he’s heard from the governor’s office: “why do all this work for $10 million?” Addabbo asserts that a fully realized New York sports betting market, complete with mobile and sports betting at stadia and arenas, could generate $100 million a year in tax revenue.
“(Do) you think the revenue from sports betting is not going to be significant enough?” Addabbo said. “Come on, you’re New York state. The leagues are headquartered in your state.”
With December numbers yet to come in, NJ sports betting is on pace to take in about $40 million sports betting revenue in 2019. New York’s population is more than twice that of New Jersey.
Addabbo called on Cuomo to put aside his feelings about gambling to bring jobs and revenue to the state:
“I know the governor is not crazy about gaming — I get it. I love sports but I’m not a sports betting guy. I don’t think I’ve placed a sports bet in my life. But this isn’t about me. I fight for it because of what the state is missing out on in revenue and jobs. When you’re in the position of elected official, you look at the big picture. You take personal feeling out of it and do what is best for our state.”
How NY casino licenses could help
Sports betting expansion alone isn’t going to affect New York’s massive budget significantly. Combined with three new casinos licenses, however, the gaming package could save a lot of state programs from the ax.
New York voters authorized up to seven casinos in 2013, with the first four located upstate to spur economic growth in the region. The moratorium for issuing the next three casino licenses expires in 2023, and Cuomo previously opposed moving up the timeline.
But reports indicate NYC-area casino developers are willing to pay $500 million for a license. Two downstate facilities, the MGM-owned Empire City Casino in Yonkers and Resorts World in Queens (located in Addabbo’s district), want full casino licenses and could quickly begin generating revenue.
Addabbo scheduled a hearing on the economic impact of the unused downstate casino licenses for Jan. 22 in the Senate Racing, Gaming and Wagering Committee. A NY gaming study being conducted by Spectrum Gaming Group will analyze the market for mobile sports betting and casino expansion. The first draft is due April 1.
“Hopefully, we can convince the budget office — enough of this back and forth already — to put servers on the lands of licensed casinos and let’s realize this revenue,” Addabbo said. “All arguments point to why we should do mobile sports betting and grant the three casino licenses.”
