The ongoing issue of mobile sports betting in New York is set to enter its next crucial phase this week with Governor Andrew Cuomo preparing to unveil his executive state budget proposal on Thursday. Question is, will it include Senator Joseph Addabbo Jr’s sports betting bill – S17 – that’s been languishing untouched since it was approved by the Senate last June?
Addabbo may well have felt some love for his long-suffering piece of legislation which was passed unanimously – and without changes – on Monday by the Senate Racing, Gaming and Wagering Committee, which he chairs. But with no mention of S17 in Cuomo’s recent 2020 State of the State address, he can expect a nervous wait over the next couple of days.
Cuomo has an ambitious budget agenda, one that includes legalizing marijuana, bolstering finances for the environment and broadening women’s rights. On that front he appears to be ticking plenty of boxes on the roll call of inclusion and diversity. Evidently, he’s hoping that New Yorkers will take to blazing up in significant numbers to help fill the state’s $6.1bn budget gap!
Smoke and mirrors aside, the Governor does have serious fiscal issues to address, notably the eye-watering dent in public finances that’s been consumed by Medicaid costs – somewhere in the region of $4bn. In his address he described the situation as unsustainable, but offered no real solution to a problem that shows now signs of abating.
Looking to Thursday, it doesn’t signal the end of the road for S17 if it fails to get a mention in Cuomo’s proposals. Addabbo still has until April 1 to convince the Governor of its worthiness for inclusion.
It’s worth looking again at what S17 sets out, specifically an initial license fee of $12m, with tax rates of 8.5% on retail sports betting, rising to 12% for mobile. Casinos will be mandated to source official league data for in-play wagers and there will be an integrity fee of 0.20% on all wagers headed the way of professional sports leagues. Tribal gaming operators would be required to partner with their commercial counterparts to get in on the mobile action.
Will the inclusion of mobile help to shore up a budget that’s heavy on spend and light on solutions? Most likely not, but on current evidence it can’t make the state’s sports betting business perform any worse.
A parlous December performance from New York’s commercially-owned sportsbooks saw yet another big drop in revenue which totaled a meager $780,418. Put in context, that was 40% down on November which, in turn, was 41% down on October. It marked a nadir in New York’s monthly revenue reporting since legal sports betting debuted in the state last July.
The introduction of mobile sports betting should, therefore, provide something of a fillip, if only by virtue of ensuring that New Yorkers don’t have to travel across state lines to place a bet. Then there’s the prospect of an estimated one-time increase in state revenue of $48m in operator licensing fees to consider.
These aren’t the kind of numbers that Cuomo will be looking to achieve to fill New York’s budget deficit. In blunt terms, it will be akin to throwing a hotdog up Fifth Avenue! But the figures should deliver a significant improvement – New Jersey tells us as much. The real question remains, though. Will Cuomo consider the pursuit of legalizing adult use of marijuana, with a projected annual income of $300m, a safer bet than regulating mobile sports wagering?