Future of New York Sports Betting in Doubt

New York City skyline at dusk

Because of significant political changes in New York after the recent election, the future of sports betting in the state is now up in the air.

Before the 2018 legislative session ended, there was a lot of positive talk regarding legalization.

Many were optimistic that a bill could be brought through before the ending of the session. However, it didn’t happen because several key issues were up for debate. Therefore, the question will now be looked at when the 2019 legislative session opens.

With a lot of New Yorkers crossing the border into New Jersey to place their sports bets, there is certainly a demand for this service in the state. However, political changes could prove to be a difficult obstacle to negotiate

Previous legalization progress

When the Supreme Court ended the federal ban on sports betting in May, many states began rushing to have a bill passed by the end of the year. While several were successful in doing so, many more are still hotly debating key points of their bills.

A few such bills were proposed in the New York legislature, but to no avail. The 2019 session begins in January. A law passed in 201, does allow for some form of sports betting in the state, but it does not cover standard sportsbooks.

One of the main issues of contention in the proposed bills involved integrity fees for the major sports leagues. This was a key reason that no consensus was reached on the proposals by Senator John Bonacic or Assemblyman Gary Pretlow.

Since nearby states such as New Jersey and Rhode Island opened their sportsbooks in 2018, New York is losing ground with each passing month. New Jersey, in particular, has been seeing some impressive gains, particularly when it comes to their mobile intake, which now outstrips the intake from physical locations.

Positive signs for legalization

There are some indications that sports betting will be legalized in New York soon. Under current law, the four casinos in upstate New York could apply for a sports betting license.

However, this law does not cover racetracks or mobile betting. Also, there could be no betting on college games played in the state or outside the state but involving New York college teams. There is also no provision in place for sports betting at the state’s tribal casinos.

There has been a push to expand this existing law. Talking about the issue, the executive director of the New York State Gaming Commission, Ron Ochym, said: “Commission staff have long been working on regulations that would effectuate sports gambling under the existing statutory language.”

The major sports leagues pushing for integrity fees are also dialing back their expectations on the matter. Previously, they were seeking as much as 2% of each wager on one of their events. The latest bills in New York had a figure of 0.2%.

However, no state so far has included integrity fees in its sports betting bill. Furthermore, the leagues in question (most notably the NBA and MLB) are now pushing more for data licensing instead of integrity fees as a source of revenue.

Current hurdles

While Governor Andrew Cuomo held onto his position, there have been some key changes in the state senate in New York. Senator John Bonacic, who was the long-standing chairman of the Senate Committee on Racing, Gaming, and Wagering, is retiring. Democrats took control of the Senate from the Republicans in the November elections.

Senator Joseph Addabbo is the new chairman of that committee. He is likely to support legalization, having been a co-sponsor of Senator Bonacic’s proposal.

However, the new chairperson of the Senate Finance Committee is causing some concern in sports betting circles. Senator Liz Krueger now holds this powerful position. Because a sports betting bill concerns state finances, it will have to go through this committee. For many years, Krueger has been a staunch opponent of expanding gambling laws.

She opposed previous attempts to legalize daily fantasy sports and online poker. She also was one of only two opposition votes to Senator Bonacic’s legalization proposal in 2018 in the Finance Committee. Krueger actively opposes all forms of gambling expansionary bills.

In her new position as chairperson, she can stop the consideration of any such bill by not including it on the committee agenda. This makes it a lot more difficult for the senate to pass such a bill.

Glimmer of hope

The glimmer of hope that remains is the fact that the governor can include legislation in the state budget. Therefore, he could include sports betting revenues, which would pave the way for legalization. However, he has to submit his budget before February 1, 2019. If sports betting legalization is not included, there could be trouble ahead.