Although sports betting is legal in New York, it’s still struggling to pass a mobile sports betting bill. It’s flanked by two thriving sports betting markets, New Jersey and Pennsylvania. They siphon bettors away from New York, depriving the state of jobs and revenue. We recently spoke to State Sen. Joseph Addabbo Jr. to understand the drama unfolding over New York’s mobile sports betting bill.
Why Mobile Sports Betting is Important For New York
Bettors may wonder why mobile sports betting is important when there’s a plague ravaging the planet. But mobile sports betting creates new economic opportunities for New York.
“This is the way that New York is losing revenue, number one,” said State Senator Joseph Addabbo Jr. “[We’re] losing educational funding because a portion of our gaming wages go toward educational funding. And also, the addiction problem. Right now, if you want to help someone who has a gaming addiction you can’t help them ‘cause you don’t know who they are.”
When New York legalized sports betting, they only allowed in-person betting. If bettors wanted to wager on mobile devices, they had to go to New Jersey. Since it’s a short train ride away, New Jersey’s superior sports betting offerings suck money out of New York State. That’s money that New York can’t afford to lose.
“Now that the pandemic’s hit, now you just added another upwards of $10 billion to our already $7 billion deficit in our budget,” said Senator Addabbo. “So the revenue need grows.”
Mobile sports betting is one of the best ways to monetize sports betting. In Colorado, 96.8% of sports bets were placed online in July 2020. That’s a big chunk of the market New York is missing out on by disallowing mobile sports betting.
Why Mobile Sports Betting Was Excluded
New York legalized sports betting in 2019, but limited betting to four casinos with a maximum of seven casinos. That’s far from the convenient offering many other states enjoy. How did mobile sports betting get axed so early on?
“At first, the question was of constitutionality of mobile sports betting in our state,” said Senator Addabbo. “But I think we’ve gone beyond the constitutionality issue because once you put the server that actually accepts the wager on the land of the licensed casino, you satisfy our constitutionality issue as well as the intent of the constitution.”
The constitutionality question seemed decisively resolved. However, New York had a chance to implement mobile sports betting back in April 2020. It was a chance to expand New York’s sports betting market and generate new revenue.
“I was advocating that it should’ve been in the budget back in April,” said Senator Addabbo. “Because it is a revenue generator and an educational funding generator. But I had that opportunity and the Governor decided not to do it. And here we are six months later or so and your need for revenue and educational funding has grown.”
Governor Cuomo’s Constitutionality Objection
Governor Cuomo has remained concerned about the constitutionality of mobile sports betting in New York. He believed it would require an amendment to New York’s constitution.
Article one, section nine of New York’s state constitution stipulates the state’s gambling requirements:
“…and except casino gambling, at no more than seven facilities as authorized and prescribed by the legislature shall hereafter be authorized or allowed within this state.”
That means casino gambling is only allowed at seven casinos tops. Governor Cuomo seems concerned that allowing mobile sports betting would make each online sportsbook count as an online casino, violating New York’s constitution.
However, Senator Addabbo’s solution is to put the servers accepting bets at the casinos. Technically, the mobile sports bets would be processed at the casinos. It’s a 21st-century solution.
But the more contentious issue now is how many skins will be allowed for each casino.
Why New York’s Number Of Skins Is Controversial
One of the best ways for states to set themselves apart from one another is by allowing greater numbers of skins. Skins is the slang word for branded online websites. For example, DraftKings’ and FanDuel’s websites would be two skins. When legislatures debate how many skins should be allowed, they’re debating how many online brands should be allowed in their state.
Allowing more skins in-state would be better. Each sportsbook must pay a license fee. The more skins the state allows the more revenue it generates from license fees. Increased competition can also lead to better odds, bonuses, and promotions for bettors.
But New York’s current sports betting bill only allows one skin per casino. That means only seven online sportsbooks would be allowed in New York. By comparison, Colorado and New Jersey allow three skins per casino, dwarfing New York’s potential market size.
“That’s gonna be an issue because obviously to maximize the revenue there would be additional skins,” said Senator Addabbo. “And you look at other states who have additional skins and right now we do not.”
Why The Mobile Sports Betting Bill Has One Skin Anyway
So why have one skin when two or three would be a vast improvement? In New York, it comes down to political pragmatism.
“If you have an administration that may be hesitant to go into the arena of mobile sports betting, you start off with one skin and you say, “Hey let’s go from there,” said Senator Addabbo. “I’ve told many that the first variation or the first incarnation of mobile sports betting in New York State won’t be the final. It’s a starting point. And you roll it out over one, two, three years and it basically expands and it changes over time.”
The single skin is just a way to get past Governor Cuomo. It’s not meant to be the industry’s final form. It just has to crack the door to mobile sports betting enough to grow the industry over time. Industry experts may decry the decision, but Senator Addabbo stands by it.
“Right now, we have zero [skins]. Right now, we have nothing. And so, to do something with one or minimal skins and grow it, that may be a strategy for New York State. But it’s something that certainly we should have a dialogue on.”
What Does Senator Addabbo’s Ideal Sports Betting Industry Look Like?
Senator Addabbo has received pushback from industry players on the single skins issue. However, he has a clear vision of where he hopes New York sports betting will go.
“You want to protect the integrity of the sport,” said Senator Addabbo. “Of course, you want to protect the integrity of the consumer. But you want to maximize it where it’s accessible and you want to be better than the other states. So that your neighbors–Pennsylvania and certainly New Jersey–those customers may come to our side.”
Senator Addabbo envisions a competitive New York market that can take its neighboring sports betting industries on. New York has gotten off to a slow start with sports betting. However, it has one resource that could help it catch up.
“A lot of the major leagues are headquartered in New York,” said Senator Addabbo. “And so, we do have a different foothold on sports than other states might have. Many people see New York as a sports capital whatever it may be a sports mecca.”
Whether New York can draw on that valuable resource remains to be seen. But it could be the leverage it needs to catch up to the premier sports betting markets flanking its borders.
How Far Along Is New York’s Sports Betting Bill?
There are many variables to weigh in passing a mobile sports betting law. How far has the bill come along?
“The bill itself is on the D version,” said Senator Addabbo. “It’s S-17 D which means it’s gone through four amendments and–listen–I don’t care if it’s the D version or F version. I don’t really mind. That means that we’re listening to people and we’re [committed] to getting it right. And then ultimately in the end it’s the governor who makes the decision about implementing it.”
Those four revisions make Senator Addabbo optimistic. New York’s senate chamber feels strongly about the bill too. “The version of this bill passed the senate 53-3,” said Senator Addabbo. “So, I’m not looking to amend a bill that passes almost overwhelmingly. I’m not looking to make great changes, but I’ll make a change if it makes the bill better long term.”
What Makes This Bill So Much Better Than Draft One?
After four drafts of his mobile sports betting bill, Senator Addabbo is passionate about this one. But what changed over those four drafts that was so significant?
“Previous versions didn’t include stadiums and arenas, so you look for accessibility, said Senator Addabbo. “We increased and actually improved upon the addiction part where there’s a…monetary amount that you go above, and your account is frozen. It’s to make sure there’s no addiction issues. New funding for addiction programs that didn’t exist before. So those things make the bill better.”
Watching the game live and placing wagers during a Mets game would be a great draw for New York sports betting. The additional gaming addiction response revenue is another strong point that a sports betting bill cannot live without. It shows how these bills can evolve to address problems beyond the bill’s primary subject matter.
Will The Bill Pass?
It’s one thing for the senate to approve the bill. However, it still must make it past the Governor’s desk. After Governor Andrew Cuomo’s repeated rejections of mobile sports betting, how optimistic is Senator Addabbo that it’ll pass?
“I gotta say I’m the most optimistic I’ve ever been,” said Senator Addabbo. “When you have great concern in the assembly and the Speaker there says, “well, we’ll do it as part of our revenue package,” I’ll be optimistic. I am [optimistic]. I won’t be happy until it’s actually passed and we’re on our way. But today, September 8, I’m very optimistic.”
Based on his optimism, New York could have mobile sports betting in 2021. Hopefully, it will, and New York will grow into a formidable sports betting market of its own.
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