Legal Sports Report

New York Sports Betting And Daily Fantasy Sports

Daily fantasy sports is legal — and regulated — in New York. And sports betting could be on the way.

The status of NY sports betting

In 2013, New York voters passed a referendum allowing for gambling expansion.

The New York Gaming Economic Development Act paved the way for the construction of four new commercial casinos in the upstate region. It also permits those properties to run sports betting under the approval of the state’s gaming commission.

Single-game wagering remains federally illegal outside of Nevada under PASPA, but that ban is being challenged in the US Supreme Court. Should the court rule in favor of the states, New York could be among the first to offer sports betting since the ban was enacted in 1992.

The status of NY DFS

On Aug. 3, 2016, the state enacted a law that allows DFS sites to serve New Yorkers once again.

During much of the turmoil the daily fantasy sports industry experienced in late 2015 and into 2016, New York has been the epicenter.

The legal issues experienced by the likes of FanDuel and DraftKings pretty much started with Attorney General Eric Schneiderman issuing cease-and-desist orders in November, and they have expanded across the country.

New York is one of the largest markets for paid-entry DFS, so the return of NY for DFS sites was a big deal ahead of daily fantasy football season.

Temporary permits were issued to DraftKings, FanDuel and a few other sites on Aug. 22; those sites and many others are now in operation in NY.

Recent New York sports betting and DFS stories

Legal sports betting basics in New York

Although there is sports betting language on the books, most of the details have yet to be finalized. The scope of the enabling law is narrow, limiting wagering to the state’s handful of commercial casinos. Further expansion might be in the cards, though.

Nobody is offering sports betting in New York yet, pending the outcome of New Jersey sports betting federal court case.

New York sports betting FAQ

Is sports betting legal in New York?

Yes, pending a change in federal law.

New York legalized sports betting at its commercial casinos in 2013. The state will not move forward with licensing and regulation until there is a resolution in the ongoing Supreme Court case.

Here is an excerpt from the law:

No gaming facility may conduct sports wagering until such time as there has been a change in federal law authorizing such or upon a ruling of a court of competent jurisdiction that such activity is lawful.

Who will oversee New York sports betting?

The New York State Gaming Commission has regulatory jurisdiction over the state’s sports betting.

Where can I bet on sports in New York?

Nowhere currently.

The 2013 law permits sports betting at the state’s commercial casinos. Lawmakers will likely try to expand those permissions in the future to include other gaming facilities, such as tribal casinos and horse racing tracks.

Who can apply for a New York sports betting license?

Under current law, the state’s four commercial casinos are the only ones eligible to apply for a sports betting license:

  • Del Lago Resort & Casino
  • Tioga Downs Casino
  • Rivers Casino & Resort Schenectady
  • Resorts World Catskills (opening Feb. 8)

That restriction will be reconsidered in 2018, however, with the possible inclusion of tribal casinos, race tracks, and off-track betting facilities (OTBs).

Who will be able to bet on sports in New York?

Anyone over the age of 21 will be able to bet on sports in New York.

Will I be able to bet on my phone in New York?

As written, the 2013 law directs the Gaming Commission to promulgate rules relating to sports betting. One of the items it will have to determine is which forms of wagering are allowed.

It’s unknown if mobile and online sports betting will be authorized. The state already has a successful mobile horse betting product. And neighboring states will have mobile sports betting, as well, making it even more likely that New York will follow suit.

 

New York sports betting timeline

2018: NBA testifies at sports betting hearing

In January, the Senate Racing, Gaming and Wagering Committee held a public hearing on sports betting. The meeting was called Sen. John Bonacic, who chairs the committee. The hearing seemed to indicate that New York’s lawmakers are ready to move forward with broad legalization.

What was surprising, however, was a new revelation from the NBA. The league had previously stood against state-based sports betting legalization. It has gone so far as to bring suit against states, like New Jersey, who try to work around PASPA.

The league’s Assistant General Counsel, Dan Spillane, voiced a new, progressive stance on sports betting from his league. According to Spillane, the NBA will no longer oppose New York’s attempt to legalize sports betting, provided it meets the league’s conditions. One of those conditions involves paying the NBA one percent of all bets placed on its games, which is a big ask.

All four major sports leagues are headquartered in New York, and protecting those relationships is of the utmost importance. Having the NBA on board could be key to the prospects of legal sports betting.

2017: Pretlow backs legislation

Late in 2016, Assemblyman Gary Pretlow announced his intentions to back sports betting legislation. “I’m looking at challenging the feds on this,” he said, “but I have more homework to do.”

Pretlow is the Chairman of the Assembly’s Racing and Wagering Committee. That essentially makes him the gatekeeper for gaming legislation in his chamber, which had previously expressed resistance. Entering 2017, though, Pretlow seemed to indicate that his concerns had been addressed.

Lawmakers from both chambers introduced matching sports betting bills in 2017. Sponsors Assemblyman David Weprin and Sen. Tony Avella have been at the front of the effort in their respective chambers since 2011. Their bills move to extend sports betting permissions to horse tracks and OTBs, in addition to the commercial casinos.

A 5438 and S 1282 were the updated numbers given to the bills in the 2017-18 session.

The new casinos authorized to conduct sports betting began to open during 2017, with the last one slated to open early in 2018. It’s widely assumed that a new bill following the Weprin/Avella model will be needed to get all of the stakeholders together.

2015-16: Sports betting bills continue to be introduced

In 2015, Weprin and Avella reintroduced their efforts from the previous session. A 3080 and S 940 were refiled in January as the tools to expand sports betting to horse tracks and off-track betting facilities.

At the same time, the state was considering daily fantasy sports legislation. The matter was referred to Attorney General Eric Schneiderman for a decision, and he dropped the hammer on DFS sites. He lumped them in with sports betting, which would have made them illegal under state law. He ordered DraftKings and FanDuel to cease operations in New York. The state went onto pass a fantasy sports law in 2016.

The sports betting bills were returned to the Judiciary Committees in their respective chambers, where they stalled once again.

2013-14: Voting yes to casino expansion, sports betting

New York voters spoke on sports betting in 2013.

That year’s ballot included a decision on a gaming package designed to stimulate the economy in the upstate region with four new casinos. Under the referendum, the new properties would be permitted to offer a broad range of gambling, including sports betting.

Voters passed the amendment, with 57 percent of them approving the expansion.

The casinos were built and opened within five years, but none of them include sportsbooks yet. Although legal in New York, federal law has prohibited the state from moving forward with its own sports betting industry.

Sen. Eric Adams once again reintroduced his standalone sports betting bill from the prior sessions. His S 2411 was the same piece of legislation he’d sponsored in both 2009 and 2011.

There were other bills on the table, though. Weprin (A 867) and Avella (S 331) filed matching bills in the legislature once again. They failed to advance out of committee again, and they were reintroduced in the 2015 session. Sen. Adams’ bill, on the other hand, has not been reintroduced again.

2011-2012: Both chambers consider sports betting

Sen. Adams introduced a copy of his previous bill once again in 2011. This time, S 3708 was backed up by another piece of legislation in the lower chamber.

Assemblyman Weprin’s name appeared on a sports betting bill for the first time with the introduction of A 10464. His bill contained most of the same language as Adams’, but it expanded wagering to include collegiate events. He also moved to allocate funds to education rather than tax relief.

Most notably, Weprin’s bill also added “any constitutionally authorized casino facility” to the list of potential licensees. The four upstate casinos would ultimately be granted that permission separately via the 2013 referendum.

The Assembly bill included a memo in support of legislation that opened with this justification:

Legalizing professional sports betting in New York would be an opportunity to diminish a serious organized crime enterprise and provide critical funds for education.

One of the memo’s sources estimated that New York could receive close to $2 billion in annual revenue from sports betting at the existing gambling facilities, a number that is likely too high.

Avella took Weprin’s lead and introduced a matching bill, S 7401 in the Senate.

None of the bills advanced out of committee, and all three were reintroduced in the 2013 session.

2009-2010: First sports betting bill appears

In 2009, Sen. Adams introduced the state’s first sports betting bill. S 6061 was aimed at horse tracks and off-track betting facilities. The bill would have allowed those facilities to offer wagers on professional sporting events. A portion of the revenue was to be allocated for tax relief to residents of the areas near the betting facilities.

The bill stalled in committee.

Daily fantasy sports basics in New York

Daily fantasy sports is back and thriving in New York.

The Senate passed legislation in the early morning hours on June 18 in 2016, just before it adjourned for the year. An aggressive lobbying effort by the industry for the bill — and by the state’s racinos against it — had put the bill’s future in doubt in the Senate up until it was called to the floor.

After a month and a half, Gov. Andrew Cuomo finally signed the bill in August. With that action, sites could begin to apply for temporary permits to operate while the full licensing process gets under way.

Before the last-minute drama in the legislature, DraftKings, FanDuel, and most other DFS operators pulled out of the state when those two sites signed a settlement in March. That was done with the intent of the sites finding a legislative solution to becoming legal. That effort was slow going at the start, but things picked up in June.

A bill was introduced by Sen. John Bonacic in February, but it saw no action for months. That had been in deference to a newly crafted bill from Rep. Gary Pretlow that surfaced in May.

Background of DFS in New York

What happened to make a new law crucial in NY?

It all started with Attorney General Eric Schneiderman. Back in October of 2015, he noted to the media that he was investigating DraftKings and FanDuel, and saying things like they are “totally unregulated gambling venues.”

The was followed by the now famous cease and desist orders to DraftKings and FanDuel in November, which likely set off a number of other attorney generals to look into DFS.

That set off a court battle. An emergency hearing was held to consider injunctions from the AG against FanDuel and DraftKings the same month.

A Supreme Court judge found on the side of the NY AG on Dec. 11, but an appeals court put a stay on the preliminary injunction, reinstating the status quo, before DK and FD exited the state in March.

Key documents for DFS in NY

Frequently asked questions about DFS in New York

Can you play fantasy sports in New York?

DraftKings, FanDuel, Yahoo, FantasyDraft and Draft have all received permits and are now operational in New York.

Here is a list of sites with temporary licenses.

What happened after New York enacted the DFS law?

All lawsuits between the NYAG and DraftKings and FanDuel will be dropped, except for the former’s false advertising claims. Both sites paid $6 million to settle the cases.

Any site that wishes to serve the New York market must be licensed by the state gaming commission.

What does the DFS regulation law do?

Here’s what the enacted law does:

  • The bill gives regulatory control to the NY State Gaming Commission.
  • Licensed operators must pay a tan on gross revenue of 15 percent, as well as another 0.5 percent tax with a cap of $50,000.
  • minimum age of 18 is established for players.
  • DFS may not involve any contests involving collegiate sporting events or horse races.
  • DFS is exempted from the part of the NY penal code dealing with gambling.
  • A number of consumer protections are put in place.

How important is the NY DFS market?

If DraftKings and FanDuel had been forced to stay out of NY indefinitely, it would have been a major setback in terms of revenue and liquidity for both FanDuel and DraftKings. New York is believed to be the second largest state in terms of both revenue and users for the two sites.

What does all this mean for the pro sports leagues?

Three major professional sports leagues — the NBA, the NHL and Major League Baseball — have equity in either DraftKings or FanDuel, and also have their headquarters in New York.

The fact that DFS is now legal in New York allows the leagues to breathe a sigh of relief.