30-second summary:
- Four upstate commercial casinos in New York can now open sportsbooks
- Indian casinos are looking to do the same
- A welcome boost for the underperforming casinos
- Online poker and statewide sports betting bills also in the works
Legalization coming soon
Sports betting in New York could be legal by the spring of 2019. The gaming regulator for the state, the New York State Gaming Commission, gave its approval for the draft regulations following a meeting on January 28. The rules were approved unanimously and the commissioner did not make any additional comments on the matter.
Governor Andrew Cuomo is in favour of this move. There will be a period of 60 days in which the public can comment on this issue.
It means that the four commercial casinos in upstate New York can now open a sportsbook. If there are no obstacles in the way, legal sports betting could be in place by the start of April, just in time for the start of the baseball season.
The announcement has come at an important time for the commercial casinos. Since opening a few years ago, their financial results have been underwhelming. They will be allowed to open up automatic sports betting kiosks inside of their sports betting lounges.
There is no mention of tribal gambling facilities in these plans. The tribes say their current state gaming compacts mean that product parity can be maintained with their commercial competitors.
This means the tribes will open sportsbooks if they see fit following the introduction of the new rules. The Oneida Indian Nation already has a partnership in place for technology companies in the sports betting space in anticipation of sports betting becoming legal.
The regulations make no allowance for offering mobile or online sports betting. They are based on a 2013 piece of legislation that does not mention digital sports betting. There would likely need to be a public referendum to change the state constitution on this matter.
A long time coming
New York has been trying to bring in some form of sports betting since the federal ban was overturned in May 2018. The legislature was close to passing an all-encompassing bill at the end of the 2018 legislative session. However, a number of stumbling blocks could not be overcome before the ending of the session. One of these was the inclusion of an integrity fee for the major sports leagues.
Governor Cuomo is eager to have sports betting in place this year. He particularly wants the four upstate casinos – the Del Lago Resort, Tioga Downs, Rivers Casino and the Resorts World Catskills – to have the chance to open a sportsbook. They are located in remote areas and have struggled to attract visitors since opening.
The 2013 law legislated for the commercial casinos in the state to be able to offer sports betting, should the federal ban be overturned. That has now happened, but they have been reluctant to do so to date despite having underwhelming revenue figures.
Each of the casinos has been missing its revenue target, pretty significantly. The Del Lago in particular is seemingly in trouble. It was given an initial warning in January 2018 to restructure its current debt levels, followed by a second warning in December. It currently has fixed charges of $50m to pay annually.
Del Lago is likely to default on its debt if it does not restructure. The Moody’s rating agency gave it a negative rating after its first year in operation as revenues fell below the forecast by $100m.
Other future legislative moves
Another issue currently on the table in New York is legal online poker. Senator Joseph Addabbo Jr. has proposed a bill that would see a total of 11 licenses being available, each costing $10m for five years. Taxation would be at 15% on gross revenues. All players will need to be at least 21 years old to use the online poker platforms.
A number of other sports betting bills are under consideration. These are wide-ranging and would open up the sector in the state. However, there is significant opposition, so it be take some time before state-wide sports betting becomes a reality.