If a proposed bill passes in New York, we may see retail sportsbooks at horse racing tracks in New York in the future.
State Assemblyman David Welpin (24th District in Queens) has introduced A5923, a bill that would make it lawful for horse racing tracks in the state to apply for licenses to operate sportsbooks on their premises. The proposed bill is seen as an effort to rekindle interest in horse racing, which has sagged in recent years.
Currently, sports betting operators must be licensed in New York and can only operate retail sportsbooks at commercial locations in association with approved partners, such as a professional sports team or at a casino. NY online sports betting, which launched in January 202, has quickly become the largest market for sports betting in the U.S.
For horse tracks to be permitted to host sportsbooks, the New York State Constitution must be amended. Welpin’s bill would do that and allow both thoroughbred and harness horse tracks to have New York sportsbooks.
Can retail sportsbooks at NY horse race tracks be profitable?
There is some question about whether retail sportsbooks located at one of the horse race tracks in New York would attract enough wagering to be profitable. Since they debuted in the Empire States in Jan. 2022, roughly $16 billion in handle has been reported via online sportsbooks. In contrast, only a little over $4 billion (or a little less than 20%) of wagers have been placed at retail sportsbooks.
Most sports fans are attracted to the convenience of placing sports bets on their mobile device via a sportsbook like DraftKings NY, Caesars NY, or FanDuel NY. For many New Yorkers, a visit to a retail sportsbook or a race track is an outing, but something they do far less than checking in on a mobile sports betting app. Also, fans can place bets on sports while at one of New York’s race track now: simply by launching an app on their phone.
Compounding the issue is the high tax rate New York places on sports betting operators. The rate on mobile sportsbooks is 51%, the highest in the nation. Those rates have caused a few sportsbooks to reconsider the amount of promotional money they offer in the state. Yet, the tax policy is reaping benefits for the state: New York collected more than $900 million in tax revenue from sportsbooks in 2022.
When will NY horse race tracks offer sports betting
The bill proposed by Welpin has yet to be considered by a committee. It would need to be sent to the floor for a vote and also signed by the governor to become law. In addition, since it changes the state constitution, it will require a 2/3 majority to pass.
So far, few lawmakers in Albany have come out supporting the plan. Instead, some industry insiders have expressed concern over its viability.
“What we have seen from sports wagering in other markets, it’s not tremendously profitable,” said Scott Daruty, President of Monarch Content Management, a simulcast purchaser and sales agent for racetracks. “I’m not saying it is unprofitable, but it is not a huge windfall. It’s not a game changer regarding changing the economics of racing facilities.”
Yet another challenge could be the incompatibility of horse racing and New York sports betting odds. In New York, horse racing odds can only be offered as pari-mutuel betting. Odds from sportsbooks are on a moneyline or point spread, which is a different betting method.
There is one place where New Yorkers can bet on horse racing and gamble on sports: Tioga Downs, as a Class III casino, hosts a retail sportsbook. It also offers harness racing on select days.
Photo by: Seth Wenig/AP Photo
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