Sports betting in New York has been dragged over the line to become a legal pastime, but only in the most limited 'brick and mortar' capacity. The state is counting the cost, while neighboring New Jersey is counting the profits.
Back in July 2013, Governor Andrew Cuomo signed the Upstate NY Gaming Economic Development Act which, following a constitutional amendment to expand casino gambling in November of the same year, allowed for the establishment of four destination gaming resorts in Upstate New York.
The New York Times described this approval as "a milestone in the gambling industry's long, expensive push to tap into the New York market,' while the original proposal was said to have been championed by Cuomo - then supported by 57 percent of voters - to boost tourism and economic development in communities across the region.
Stacey Rowland is the VP and General Counsel at Rivers Casino, one of the four upstate casinos in question. Speaking at this year's Betting on Sports America (BOSA) conference, she confirmed that the legislation passed in 2013 "also contemplated if PASPA were ever to be overturned that sports wagering would be permitted at those four casinos."
Given its supposed readiness for PASPA repeal, and with Cuomo still at the wheel, it is perhaps strange that the state has been so slow to act on the sports betting front. In-person sports wagering was finally liberalized last month, more than a year post-PASPA repeal, and mobile betting - despite winning senate approval - has stalled in a political quagmire.
Jeremy Kleiman, Partner at Saiber, admitted that when he drafted the casino license in 2013 he 'didn't have the foresight to include mobile,' which is 'where the issue is right now' - particularly given that high-flying neighbor New Jersey saw more than 80 percent of wagers placed online in passing the total handle in Nevada for the first time in May 2019.
This 'slow walking' towards mobile - a phrase coined by the BOSA session moderator Kevin J. Weber (Dickinson Wright) - has since been justified by Cuomo over concerns about the constitutionality of mobile sports betting in New York. Cuomo, along with his senior gaming advisors, argue that allowing mobile betting might require an amendment to the State Constitution, which would take at least three years.
'Well I totally disagree with that,' said Kleiman. 'This is no different than how we do mobile betting with horse racing. You know, horse racing has allowed it constitutionally. We take the position that the server is in the casino. The players, no matter where they are, are deemed to be at the casino when they're placing their bets.
'There's absolutely no difference between that and your NYRA bets which is the online for horse racing for NYRA, and that's constitutionally acceptable. So our feeling is that this would also be constitutionally acceptable.'
'I totally agree,' responded Gary Pretlow, Assemblyman for New York State. 'The constitution allows for casino gambling and sports betting is gambling in a casino. Right, you have a sportsbook in a casino. So by definition that's right. The bet is struck on the server. If the server is physically located in the casino that's casino gambling.'
Alongside Pretlow, Senator Joseph Addabbo Jr. championed a bill that would have permitted the upstate casinos to offer statewide mobile sports wagering in New York.
Addabbo believes that Cuomo and Assembly Speaker Carl Heastie are using the constitutionality issue as an excuse for personal aversion to gambling expansion, adding that the bill - which the Senate backed by an overwhelming 57-5 margin - 'easily would have passed if only Heastie put it up for a vote.'
Upon confirmation of the Assembly's failure to pass this bill, he tweeted: 'I have not witnessed a clear reason why NY can't implement mobile sports betting this year. Just for the remainder of this fiscal year, we would be losing out on approximately $75 million in revenue, educational funding and both job creation and retention.'
It's impossible to talk about sports betting, mobile or otherwise, in New York State without reference to tribal gaming and the influence it brings to bear on the policy making process . And mobile is, again, a highly contentious point.
Pretlow explained that there were two proposals on the table for tribes. 'One was to geo-locate any one in their compact area or to only be allowed to bet on sports at the compact area,' he advised. 'The second would be to open it up for everyone go statewide which means the Senecas can offer betting opportunities in New York City and New York City operators can offer betting opportunities in the Seneca Nation.'
Kleiman told the conference that this presents a serious issue. He said, 'So now you have the tribes - they really have a tactical advantage in competing statewide for players with the commercial casinos. And they'll be able to market at a much higher level because they don't have the same tax burdens. So I'm not sure, you know, without renegotiating the compacts, how you solve that and I would suspect that that may be one of the reasons why New York has been slower.'
Kleiman added that there may have been some resistance from certain corners of government to move forward with online because, in his opinion, structurally there is an imbalance between the commercial casinos and the tribes.
Perhaps he's right, but structural imbalances and political indisposition aside, the cost to the state from a lack of movement on mobile betting continues to rise while neighboring New Jersey flourishes.
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