Gov. Andrew Cuomo‘s proposed New York sports betting model lacks support from two lawmakers who have pushed for online gambling in the state.
Sen. Joe Addabbo Jr. and Assemblyman Gary Pretlow released their 2021 NY online sports betting bill Thursday evening, though it looks a lot like their previous attempt.
The biggest difference is the bill calls for two skins per licensee instead of one each. There are four commercial casinos and three tribes that run casinos in New York that could offer online sports betting.
That would likely create a much more robust market in terms of handle but tax revenue could fall well short of what Cuomo expects from a lottery-style monopoly.
New York sports betting bill details
- A one-time, $12 million fee is required for anyone operating a mobile sportsbook in the state.
- Mobile sports betting revenue will be taxed at 12%. The state will set aside 5% of that tax revenue for problem gambling.
- Official league data is still required for all in-play bets. The bill also calls for a royalty fee of 0.2% of handle to be paid to sports leagues. Assuming sportsbooks hold about 5% of bets, that means about 4% of sports betting revenue to the leagues.
- Professional sports stadiums and arenas as well as off-track betting facilities can partner with a casino to have betting kiosks on-site.
The bill summary suggests $79 million in annual revenue to the state based on “conservative market estimates.” That might not be good enough for Cuomo, though.
Cuomo expects how much?
Gov. Cuomo has much higher expectations for what the state should make from sports betting.
The US sports betting industry was surprised to wake up Wednesday to find Cuomo had changed his stance on mobile sports betting. The excitement felt throughout the industry quickly turned to jokes, though, when the governor described his plan during the Q&A portion of his coronavirus press conference:
“We want to do sports betting the way the state runs the lottery where the state gets the revenues. Many states have done sports betting but they basically allow casinos to run their own gambling operations. That makes a lot of money for casinos but it makes minimal money for the state, and I’m not here to make casinos a lot of money. I’m here to raise funds for the state.”
Budget Director Robert Mujica explained that the standard sports betting model would net New York about $50 million a year in tax revenue. But a single-operator monopoly could bring in $500 million annually, Mujica said. We won’t know any other details of the proposal until Cuomo releases his budget.
Assuming a 50-50 revenue split and a 5% hold, New York’s sports betting market would have to take $20 billion in bets annually to make the state $500 million. That’s not impossible for any of the “crown jewel” states like California, Florida, New York and Texas.
It won’t happen in year one, though, and could take significantly longer to reach those heights under a monopoly.