How Senator Addabbo Hopes To Add $1 Billion To NY Budget With Help Of Mobile Sports Betting

Mobile sports betting has been a thorny issue in New York since the Supreme Court declared PASPA unconstitutional. New Jersey and Pennsylvania have grown into sports betting Meccas where bettors wager hundreds of millions of dollars a month on sports. However, most of those wagers are made online. New York’s casinos got retail sportsbooks in 2019, but the state still doesn’t have mobile sports betting. States like Colorado see 98% of sports wagers made online. New York may as well not have a sports betting industry when only a few hundred thousand dollars get wagered a month.

New York State Senator Joe Addabbo tried to pass a bill that would legalize mobile sports betting in New York. In 2019, it passed the Senate 57-5. But it never made it to the floor of the Assembly. The Assembly didn’t want to risk Governor Cuomo’s veto.

But the world is different in 2020. New York’s budget deficit has worsened during the pandemic. Senator Addabbo believes he has one more shot this year to bring mobile sports betting to New York and generate much-needed revenue. We reached out for an interview with Senator Addabbo to learn how he was trying to bring mobile sports betting to New York with a revenue bill.

Why A Revenue Bill Instead Of A Traditional Bill?

Senator Addabbo’s mobile sports betting bill may not have made it through the Assembly last year. However, a revenue bill is his next chance to bring legal online sports betting to New York. But even that’s not the biggest reason he’s trying to legalize mobile sports betting with a revenue bill.

“It’s the pandemic,” Senator Addabbo said. “Since [last year,] the pandemic has just wreaked havoc on our budget. When you add in our budget shortfall, the budget shortfalls of the local municipalities across our state, the [Metropolitan Transportation Authority], things like that, [it’s] a $50 billion shortfall.”

Addabbo’s $50 billion is actually a little modest. A reported $30 billion state shortfall, the MTA’s $12 billion shortfall, and New York City’s $9 billion shortfall come out to $51 billion. New York’s financial challenges predate the pandemic, and the state expected federal help in combating them.

“We’ve been waiting for the federal stimulus–the second round after the CARES Act–since June,” said Addabbo. “Here we are in December and one thing we’ve found out is the federal stimulus is kind of unreliable. Inconsistent. So we need revenue going forward because we can’t keep looking at the federal government for help.”

How Support For Sports Betting Has Evolved

Senator Addabbo’s original mobile sports betting bill failed in the Assembly. But many representatives who felt iffy about mobile sports betting in 2019 have warmed to the idea in 2020.

“You know I can’t speak for others,” Addabbo said. “But based on conversations or statements made to the media, those that were on the fence…now [say] “Hey, we need the revenue. Let’s do it.”

New Jersey’s competitive sports betting industry remains a significant pressure, too. And it’s not just because a successful sports betting industry is a half-hour drive away. “We did a hearing last year on my committee, the Gaming Committee,” Addabbo said. “And we know roughly 25% of New Jersey’s numbers are our numbers. They’re mobile devices coming from New York to go to Jersey.”

It’s true. In May 2019, FanDuel’s COO testified that 25% of FanDuel’s New Jersey sports betting revenue comes from New Yorkers crossing the border to wager remotely. The New Jersey border is more accessible than New York’s northern casinos and retail sportsbooks.

All The Money New Yorkers Are Sending To New Jersey

New Yorkers’ willingness to scooch over state lines to bet online is a testament to mobile sports betting’s popularity. However, the financial impact on New York is less funny–especially to Senator Addabbo.

“Whenever Jersey puts out their numbers–$900 million sports [betting] handle for the month of November–I pay 25% of that. $200 million roughly. I’d say that’s our money. That’s our revenue. That’s our educational funds because 80% of our gaming industry goes to educational funds. That’s our money going to Jersey.”

New Jersey’s total betting handle was $931 million in November, surpassing its previous best of October’s $803 million. A quarter of November’s betting handle would be just under $233 million. That’s a lot of revenue that New Yorkers have contributed to New Jersey’s sports betting industry. If it was taxed at a previous bill’s proposed 12% rate, New York would have made almost $28 million from mobile sports betting–$22.4 million of which would’ve funded New York education.

That’s without putting numbers on Pennsylvania, Delaware, or Connecticut.

And in 2021, Maryland.

What Putting Mobile NY Sports Betting In The Revenue Bill Actually Means

If Senator Addabbo succeeds in adding mobile sports betting, what happens next? Does his bill become law? Does the Assembly bloody the House Floor in a fresh round of debate? Senator Addabbo pulled the curtain back on the inner workings of New York’s state officials.

“[The sports betting bill] would have to be orchestrated between us and the Senate, the Assembly, and the Governor,” said Addabbo. “So, even if the Assembly goes, ‘Hey, we want to do this,’ and the Governor [says] okay, the Governor, through the Gaming Commission and maybe [the] Lottery Division [are] going to have to figure out the servers, the nuts and bolts of mobile sports betting. They’re going to have to implement it.”

So if the Legislature passes the revenue bill, bringing mobile sports betting to life becomes the Governor’s problem. Governor Cuomo would work with the Gaming Commission and the Lottery Division to bring mobile sports betting to life. It’s not that different from other states’ legalization processes. Once the bill is signed, the Gaming Commissions go to work.

Easy.

However, Senator Addabbo was quick to remind us that implementing mobile sports betting would take a while. “I remind many [that] this is not a light switch,” Addabbo said. “We don’t do mobile sports betting today and tomorrow we flip the light switch on and hundreds of millions of dollars will come rolling in. No. It’s gonna take time. That’s why I don’t want to do it in April without a budget. I want to do it in January. I want to do it this year if I could.”

Current Negotiations

Right now, both legislative chambers are negotiating the budget with the Governor’s office. Everyone has to agree to a budget in April, so these early talks are critical.

“The leaders of the Senate, Andrea Stewart-Cousins my leader, call [Carl] Heastie, the Speaker of the Assembly, and the Governor’s people are talking [with them]. What’s obtainable? What can we get? What can we do now? What kind of revenue package is the Governor willing to sign, if not this year, then early January? So that’s the idea. I think right now we’re in discussion.”

Some representatives are reportedly holding out for the federal stimulus package. It would likely be some billion dollars that New York could add to different parts of its budget. But Senator Addabbo isn’t holding his breath for the federal government to help out.

“[We’re negotiating] with always an eye on the stimulus,” Addabbo said. “But again, I hope we don’t wait for the federal stimulus because it’s late and it’s unreliable. So hopefully that’s where we’re at. The negotiations are ongoing.”

The Federal Stimulus

Since some unnamed representatives are waiting to see how the federal stimulus pans out, we wondered what would happen if it were to pass. If the federal stimulus magically passed tonight, would the pressure to pass mobile sports betting and create new revenue streams ease?

“I don’t think it should,” said Addabbo. “Again, the federal stimulus is not consistent. It’s not gonna be twice in 2021 and twice in 2022. It’s a one-shot, and you can’t count on it. It gets you out of a hole and it’s appreciated. No question. We are thankful. But it’s not that consistent significant revenue you need going forward as New York State does. Because right now, we lose about a billion dollars every year between our residents [going] to [New] Jersey or Pennsylvania or Connecticut.”

That billion dollars each year may sound dramatic, but it’s actually a modest estimate. (And it’s likely an estimate or a projection.) 600 words ago, we estimated how much money New York was losing to New Jersey–about $28 million. $28 million every month for twelve months is $336 million. If the same number of New Yorkers hit surrounding states to place sports wagers in industries of similar size, arriving at $1 billion in lost tax revenue becomes reasonable. It’s also clear why Senator Addabbo is so determined to get that money back into New York.

How Modest The CARES Act Was

Senator Addabbo may be skeptical about how helpful a new federal stimulus package would be because the last one wasn’t the cure to New York’s budget problems, either. “[The CARES Act] was a $3 trillion package,” Addabbo said. “When it boiled down to New York State, the money that went to the budget–not to the state but to our budget–that’s $5 billion.”

New York State received $7.5 billion from the CARES Act. $5 billion went to the state’s budget, and the other $2.5 billion went to other local municipalities.

“It’s appreciated,” Addabbo said, “but it’s not gonna cure all your budget woes. So you would be looking at deep cuts to healthcare during a pandemic or deep cuts to education, which no one wants to do…Unless you make cuts in a $178 billion budget that won’t affect your residents–and I’m sure there’s some fat there that you could trim–but that next cut could be a healthcare cut that you don’t want to lose. So the idea is you’re gonna need revenue.”

Senator Addabbo takes a stark view of the budgeting process. It doesn’t seem to be just about creating more revenue for him. It also seems to be about avoiding cuts to public services.

Governor Cuomo On Mobile Sports Betting

Senator Addabbo has been advocating for mobile sports betting for over a year. However, Governor Cuomo has repeatedly expressed reservations about mobile sports betting. In our September interview, Senator Addabbo cited ways he tried to convince Governor Cuomo to accept the constitutionality of mobile sports betting. But in three months, Governor Cuomo seems to have opened up to mobile sports betting.

“Today I spoke to a number of reporters,” Addabbo said Wednesday, December 16. “The Governor at his little press conference today–his update–he mentions sports betting…First time, I think that he mentioned it publicly and I appreciate that.”

That small nod from Governor Cuomo is more significant than it seems. Governor Cuomo has a history of opposing issues, publicly changing his mind, and signing the issue into law within a year.

Governor Cuomo has done this with medical marijuana and paid family leave. He publicly opposed medical marijuana until January 2014. He signed New York’s medical marijuana law in June later that year. New York’s paid family leave policy shows a similar pattern. Governor Cuomo opposed it until roughly March 2015 when he signaled he was willing to work with the Legislature on the issue. On April 4, 2016, he signed a 12-week paid family leave policy into law.

If the same pattern holds, we may have just started the countdown clock to mobile sports betting in New York. It could become legal in a matter of months. It’s hopeful, but these early signals from Governor Cuomo are encouraging.

What About The Veto?

Governor Cuomo has a line-item veto that allows him to veto parts of the revenue bill. That means if the legislature wants to put money into mobile sports betting, Governor Cuomo doesn’t have to object to the whole revenue bill. He can just object to that section and send an adjusted bill back to the Assembly. However, Senator Addabbo hopes it doesn’t come to that.

“Here’s the thing,” Addabbo said. “We passed it last year on the Senate floor 57-5…You don’t want to do a veto override. You don’t. I remember from my City Council days when we were overriding the veto of then-Mayor Bloomberg. In the end, mayors, Governor Cuomo, they have implementation authority…So even if you override a veto and it becomes law, the Governor still says, “Hey, I still have the authority to implement this or not. I’ll let it sit there.” You don’t want to do an override of a veto. You don’t.”

Senator Addabbo is likely referring to his effort overriding former Mayor Bloomberg’s veto of the 2006 Gas Pricing Bill. It prohibited gas stations from:

  • Charging different prices at the pump than what was displayed on the sign.
  • Changing the gas price more than once every 24 hours.

It was a win for consumer protection. But whatever then-Councilman Addabbo experienced in the aftermath of that veto override, he seems to have taken it to heart as a State Senator. “I certainly want to work with the Governor’s office on this,” Addabbo said.

How Much Money Would Be Budgeted For Mobile Sports Betting?

Mobile sports betting would be part of a revenue package. So rather than seeing one line for mobile sports betting, it would likely be bundled into some larger category. That’s why Senator Addabbo offered a combined figure.

“Alone, mobile sports betting and the [downstate casino] licenses will be about $1 billion upfront,” Addabbo said. “That basically offsets some minor cuts and it does address some of the shortfalls in your budget.”

That $1 billion is almost entirely from two casino licenses. There are two New York City casino licenses up for $500 million each. If they get the go-ahead, that would be an immediate $1 billion. However, mobile sports betting and these two casino licenses would prepare for long-term growth, too.

“My thing with mobile sports betting and gaming, you start off with $1 billion upfront which is a significant number. But then the ongoing revenue going forward increases as well, as we’ve seen with [New] Jersey.”

Between the promise of an immediate infusion of cash and a long-term growth strategy, Senator Addabbo is optimistic about offering mobile sports betting and these two casino licenses as part of the same budget package. But since negotiations are ongoing, we won’t know whether they’ve gotten the go-ahead until we start seeing some votes and press releases.

The NY Revenue Bill’s Timeline

The New York State government has procedures in place to ensure bills are considered and analyzed appropriately. Consequently, the timeline of a revenue bill like the one Senator Addabbo is proposing is several weeks.

“It takes ten days from the moment the legislature in both houses–the Assembly and the Senate–pass a bill. The Governor has ten days to sign it. So you backtrack 31 minus 10 is [on] the 21 of December.”

So if Senator Addabbo wants his revenue bill on the Governor’s desk, he needs to get it there by December 21, right? Not quite. There’s another procedural step.

“When we introduce a bill, it has to age three days. That’s a process unless the Governor gives us a message of necessity. So that’s another three days.”

That would bring him to December 18. That’s why he’s probably not going to legalize mobile sports betting in December 2020. The procedural clock is against him. However, he has until April 1 to get mobile sports betting in the budget. So, early January is his next target.

“I think that if we blow past December 31, I would hope that we do things in early January,” said Addabbo. “And the fact that we changed the legislative procedural rules to allow us to do things virtually via Zoom, things happen rather quickly…So, I’m confident we can do something in the early part of January.”

Senator Addabbo remains determined to bring mobile sports betting to New York. The progress he’s seen since even September 2020 seems to encourage him. As enthusiasm for mobile sports betting builds, New York bettors would do well to watch these bills coming across the Governor’s desk. One of them could fundamentally change New York’s sports betting industry.

About the Author

Chris Gerlacher

Christopher Gerlacher is a freelance writer that resides in the foothills of Colorado Springs.

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