Legalized betting apps coming to NY, but experts wonder if this is the right approach
Gambling industry experts are hedging their bets after Gov. Cuomo’s rollout of legalized mobile sports betting across New York.
While no one doubts the house will win — it always does — questions arose about the state’s tight control of the plan, the limited number of betting options and the effect on the state’s tribal-run casinos. Others suggested Cuomo’s prediction of $500 million in state revenue within three years was overly optimistic.
“They’ve got two feet in, but they’re wearing two different shoes,” said Adam Candlee, managing editor of the Legal Sports Report. “I did call it a mess, because of the language in the bill. From the beginning of the process, Gov. Cuomo wanted a model run by the state and to limit the number of operators.”
The operator of New Jersey’s Meadowlands racetrack, who feared a loss of 30% in his business once New York state opened for gambling, said the plan as announced won’t cost him a penny.
“I don’t expect to take a hit at all this year,” said Jeffrey Gural, who also owns a casino and a racino in New York. “I don’t know who convinced Cuomo to do it this way. This is not the way to go.”
Cuomo, in a pandemic reversal, announced last week that the state will authorize mobile sports betting. Under the plan, the state would retain a large amount of oversight and a considerable financial stake similar to the state lottery.
The New York approach includes just two primary gambling vendors, operating with four betting app operators. They in turn would partner with a state casino, dancing around the state’s constitutional ban on gambling.
A request for applications will go out before July 1, with responses due in 30 days and the contracts awarded within the ensuing five months.
Critics prefer the lucrative New Jersey model, allowing for competition between sports books nationwide. The results are hard to refute: $6 billion in bets during 2020 through more than a dozen sites — with more than $100 million wagered this year on the Super Bowl alone.
Industry experts say about 20% of New Jersey’s sports bets are made by New Yorkers who cross the border to wager, and that could continue given the wider number of Garden State betting options.
There was immediate blowback from the Oneida Nation, operators of upstate casinos under a 2013 settlement with New York state. They already pay the state $70 million a year for gaming exclusivity in the region, but could get bumped from the sports betting windfall.
“We are disappointed and believe the legislation is a step backward, as the state apparently expects (us) to bid for the right to offer mobile sports betting,” read a statement from Oneida Nation. A spokesman declined comment on the nation’s plan of action going forward.
The history of legalized gambling in New York includes the city’s Offtrack Betting Corp., which became a fiscal disaster as noted by mayoral candidate Rudy Giuliani in his 1993 campaign: “The only bookie operation in the world to lose money.”
But nobody sees the new plan running at a deficit. There are doubts, however, about the amount of profit the betting will generate. Chris Grove, director of Eilers and Krejick Gaming, suggests it will take some time for everything to shake out.
“This doesn’t appear to be the most consumer friendly framework,” he said. “There are gaps to fill in. I believe there was a strategic ambiguity designed to to leave a fair amount of doors open. It doesn’t make it clear who all of the winners and losers are.”
