Cuomo Reverses Course on Mobile

2021 could be the year that mobile sports betting comes to New York state, and if it does happen, Governor Andrew Cuomo could be the main impetus. 

In comments about the upcoming New York State Budget, Cuomo indicated that he was in favor of mobile sports betting, although enthusiasm for his remarks was tempered somewhat by the fact that he has proposed that the state lottery runs the sector. 

Cuomo said that he wanted the state, which oversees the lottery, to benefit from the revenues, and cited the examples of many states that have allowed casinos to run their own sports betting operations, which he claims makes significant amounts of money for the casinos but raises only minimal revenues for the state. 

Change of Heart

Even allowing for the state lottery caveat, this still represents a remarkable change of heart for the Governor, who has been a consistent opponent of mobile sports betting, and who has insisted that the state would need to bring in a constitutional amendment to allow it.

Cuomo’s mind appears to have been changed by the multibillion-dollar shortfall in the state budget, which was due largely to the effects of the Covid-19 pandemic, at a time when the state is hemorrhaging sports betting revenue to neighboring New Jersey. 

In his comments, Cuomo highlighted the two issues, stating that the historic budget deficit in New York coincided with a significant number of New York residents opting to head out of state or find black market outlets to bet with due to the structure of the state’s online sports wagering. 

In fact, the reverse course was signaled back in December, when the Governor floated the idea of marijuana legalization and mobile sports betting as possible budgetary bandages. 

Crown Jewel

The potential size of the mobile sports betting market in the state could see New York become the ‘crown jewel’ of US sports betting. A report from analysts Eilers & Krejcki Gaming in February last year estimated that New Yorkers bet around $837 million in New Jersey during 2019. In fact, around 20% of New Jersey sports wagering comes from visitors from over the border. 

Sports betting handle in the Garden State has risen from $4.5 billion in 2019 to $5 billion in the first 11 months of 2020 and is likely to near the $6 billion marks by the time all the figures are in. And this increase has been achieved despite the significant disruption to sports schedules that occurred between April and July. 

The potential of New York mobile betting in terms of revenue was recognized by Cuomo, who was speaking to the New York Daily News:

“New York has the potential to be the largest sports wagering market in the United States, and by legalizing online sports betting, we aim to keep millions of dollars in tax revenue here at home, which will only strengthen our ability to rebuild from the COVID-19 crisis.”

The Shape of New York Mobile Betting

Initial reports suggested that Cuomo might consider asking legislators to force mobile sports betting operators to link with an existing casino, although his subsequent comments about the state lottery have thrown that into question. 

Currently, sports betting in New York state can only be done in person at a small number of venues. These include the Rivers Sportsbook in Schenectady, FanDuel Sportsbook at Tioga Downs, Turning Stone casino at Syracuse, and Resorts World Catskills casino in Monticello. It isn’t clear how those casinos would line up with sports betting operators, nor has there yet been any indication of Cuomo’s idea of a licensing fee or tax rate. New Jersey has a 13% levy rate on mobile sports betting revenue, so New York’s tax rate is likely to have to shadow that figure. 

Rocky Road 

Still, there may yet be a rocky road to travel if mobile sports betting is to come to New York. Legislators will have to pass more than one piece of legislation, something that has proven to be beyond them in the past. After sports betting was legalized at four casinos in 2013, Senator Joe Addabbo and Assemblyman Gary Pretlow made multiple attempts to add mobile betting, all of which have failed, though Cuomo’s likely veto made all such efforts an uphill struggle. 

In that context, Cuomo’s change of heart could prove to make the difference in 2021, and it will now be down to the politicians to come forward and make their case for or against, knowing that mobile sports betting could be a real possibility rather than a niche campaign.

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