Mobile Sports Betting Coming to New York

It’s short on details, but a deal has been finally reached between New York legislators and Governor Andrew Cuomo (l.) to bid out two sports betting licenses and select the winners by the end of the year. But the deal has many hurdles to overcome and lots of criticism.

Mobile Sports Betting Coming to New York

The New York legislature and Governor Andrew Cuomo have reached agreement on a $212 billion state budget that calls for expanding sports betting to the internet along the limited lines envisioned by the governor.

Though key details of the April 7 deal remain to be filled in, the plan basically empowers the New York State Gaming Commission to bid out two licenses beginning July 1, then select the winners through a points system determined largely by how much money applicants say they’ll make for the state.

Frontrunners for the licenses are expected to include the seven land-based books currently taking bets in the state:

  • FanDuel at Tioga Downs Casino Resort
  • DraftKings at del Lago Resort & Casino
  • BetRivers at Rivers Casino & Resort
  • Bet365 at Resorts World Catskills; along with Kambi, which operates the books at the Seneca Indian Nations’ three casinos
  • Caesars/William Hill at the Oneida Nation’s Turning Stone Resort Casino
  • FOX Bet at the Akwesasne Mohawk Casino Resort.

The agreement is a far cry from the more open-market approach pushed by gaming advocates in the legislature. They wanted four platforms, one per commercial casino, with up to two skins each, 14 in all, counting the three downstate casinos that are expected to be licensed in 2023. They also wanted betting kiosks at sports arenas, racetracks and OTBs.

But at minimum, as a “hybrid,” as state Senator Joseph Addabbo termed the April 7 deal, it means the upstate casinos will likely be in position to accept smartphone bets in time for the 2022 Super Bowl.

“We had a different vision of what mobile sports betting could look like,” the senator said. “But if both sides dug in their heels, we wouldn’t have this agreement. We worked out a deal.”

Going back to January, when Cuomo first inserted internet sports betting into the budget negotiations, he made no secret of his preference for a state-controlled system providing market exclusivity in exchange for a 50-55 percent share of revenues, similar to what DraftKings pays New Hampshire for its monopoly there. It appears he’s compromised on that, although the tax rate has yet to be determined. He’s also agreed to eliminate the New York Lottery from the process. And he’s given in to Addabbo and industry advocates in the legislature on the possibility of more licenses in the future, “if (the Gaming Commission) determines such additional awards are in the best interests of the state,” as the deal reads.

But if the duopoly can double neighboring New Jersey’s $6 billion in 2020 handle, as he and lawmakers believe, he’s satisfied it will pump at least $99 million into the treasury in the market’s first full year, providing badly needed relief for a fiscal situation ravaged by the Covid-19 crisis, and up to $500 million a year by 2025.

The two platforms also will be assessed a one-time $25 million fee for their renewable 10-year licenses and will pay $5 million a year to the four commercial casinos to host their servers.

“There are certainly details that have to be worked out,” Addabbo said. “But it’s going to be a product that New Yorkers can be proud of and will hopefully utilize.”

The details include the possibility of a costly dispute with the Oneidas, who pay the state around $70 million of their annual slot machine win in exchange for market exclusivity over a broad swath of central New York. They contend the deal could violate their exclusivity, and they’re threatening to withhold the payments.

The tribe issued a statement saying, “We are disappointed and believe the legislation is a step backwards, as the state apparently expects the Oneida Indian Nation to bid for the right to offer mobile sports betting within our own 10-county zone, for which the nation already pays the state and localities.

They criticized the deal as “an unbalanced approach that will unnecessarily hurt our region, but said they “remain open to discussing workable solutions when the state is prepared to do so.”

It’s reported the tribe wants a server of its own and some assurance they’ll get a share of the revenues from remote wagers placed within the exclusivity zone.

Cuomo said last week he’s willing to work something out.