The moment New York sports bettors have been waiting for has finally arrived. New York’s Gaming Commission will issue request for proposals by July 1. That means sportsbooks will begin a bidding war to earn one of at least four New York sports betting licenses. It’s when the beginning of New York’s mobile sports betting market will take shape.
As mobile sportsbook operators begin proposing plans to maximize New York’s sports betting revenue, it’s worth remembering how New York got here. It’s a good time to see how previous speculations panned out and what we can expect from New York’s mobile sports betting market.
Why Mobile Sports Betting Is So Important For New York
Mobile sports betting is expected to become a profitable venture for New York. According to Forbes, New York sports betting could generate almost $500 in annual tax revenue at market maturity. That projection stretches out to 2025, but it gives bettors an idea of how much money New York state hopes to make for itself.
It would also recapture the sports betting revenue New York currently loses to New Jersey. New Jersey has had mobile sports betting for several years, and New Yorkers have taken the ferry just to place sports wagers on their devices.
Besides those reasons, 90% of U.S. sports wagers are expected to be made online in the next five to 10 years. New York would’ve had no chance at a competitive sports betting market. Retail sportsbooks aren’t convenient for all New Yorkers. That’s why many of them were willing to crowd a Starbucks across the river to bet online instead.
But money aside, legalizing mobile sports betting would also make it easier to track and help problem gamblers. However, that will only be true if New York and its mobile sportsbooks make the effort to track them. Sportsbooks in the United Kingdom require bettors to prove they can afford to place larger bets if their betting behaviors change. If New York’s Gaming Commission instituted a similar requirement, then they could make a greater difference in problem gambling.
1% of gaming revenues up to $6 million per year is a start, but it’ll mean little unless that money translates to concrete action.
Missed Opportunity For Cash Up Front
There’s one area where sports analysts may be disappointed. In September 2020, we quoted Senator Addabbo saying he had a way to add $1 billion to New York’s budget through up front licensing fees. As we reported then, virtually all that money would’ve come from two casino licenses that were on the line. New York already has four casinos, but it also had three slated for development in 2023. An agreement to move that year up to 2021 was almost part of a large gaming revenue package.
But the agreement fell through at the last minute, so there will be no $1 billion boost to New York’s budget. (Had the agreement gone through, Senator Addabbo would’ve undersold his proposal for additional revenue by $500 million.) Instead, New York will have to wait for its sports betting industry to mature before raking in hundreds of millions of dollars per year. However, New York lawmakers could also push to have the casino development year moved to 2022. Being able to take credit for a $1.5 billion boost to the state budget would be politically advantageous.
New York’s Newest Sports Betting Challenges
Although a mature sports betting industry could be profitable for New York, it faces new pressures. Canada is about to legalize single-event sports betting, with Ontario being the first to roll sports betting out. New Jersey and Pennsylvania remain sports betting powerhouses. New York will be competitive, but it’ll have to work hard to differentiate itself among a formidable field of sports betting industries.
However, New York has taken an early step in the right direction. In the original bill, Senator Addabbo only pushed for one skin per operator. It seemed like a safe way to legalize sports betting. Despite Governor Cuomo’s evolution on sports betting, he has remained fixed to the single operator model.
However, Senator Addabbo and Assemblyman Gary Pretlow still want two skins per operator. Both have introduced bills in their chambers that would increase the number of skins from one to two. In theory, that would double the number of operators allowed to compete in New York. But the New York Gaming Commission must first select the first round of operators. There will be at least four, which basically guarantees at least DraftKings and FanDuel footholds in New York’s new sports betting market. Although the Gaming Commission can authorize unlimited sportsbook operators, it’ll seek the most profitable option for the state.
But New York would actually have to choose to license that many sportsbooks. If their proposals aren’t good enough, any sportsbook that isn’t one of the first four to enter will be set back in New York. New York’s selection process will pose a unique challenge to smaller sportsbook operators. But it will further Governor Cuomo’s goal of maximizing tax revenue for the state.
New York Sports Betting
It’s taken New York a long time to embrace mobile sports betting, and that wait will have consequences. Governor Cuomo’s reservations about conflicts with the state constitution have cost New York’s sports betting valuable time. New York won’t recapture New Jersey bettors’ money overnight. Its neighbor, New Jersey, still has a large market of sportsbooks for bettors to choose from. New York’s initial selection will be limited and may not be attractive enough for bettors with better deals over the Hudson River.
However, inviting sportsbook operators to submit proposals is an exciting step for New York bettors. It means bettors are that much closer to learning which sportsbooks will likely become available in New York first. While the rollout isn’t perfect, New York sports betting offers a lot of promise. It’s expected to grow into a thriving industry that generates meaningful revenue for the state and fills a market need that New Jersey has happily filled for years. Even though it’s still early, there’s a lot for New York bettors to look forward to.