By Jimmy Vielkind
ALBANY, N.Y. -- New York lawmakers were set to legalize mobile
sports betting as part of the new state budget headed for final
approval on Wednesday.
The state will select at least two companies through a
competitive bidding process this year to operate online wagering,
according to language in the $212 billion spending plan. Members of
the Democrat-controlled state Senate approved the budget bill with
the provisions early on Wednesday; the state Assembly was set to
vote on it Wednesday afternoon. Gov. Andrew Cuomo said he would
sign the measure.
Lawmakers considered and rejected a budget provision that would
have permitted up to three additional casinos in downstate areas,
including New York City. Licenses for that area are on hold until
2023. The budget did call for the state Gaming Commission to
solicit interest from prospective bidders and write a report about
But state leaders said New York was losing out on revenue from
mobile sports betting to illegal operators and nearby states,
including New Jersey. They said they hope legal wagers will
eventually yield $500 million of annual tax revenue.
The budget language requires the Gaming Commission to issue a
request for proposals by July and award licenses later this year.
The commission must select two platform providers, but they may
partner with multiple operators, or skins, which provide
State Sen. Joe Addabbo, a Democrat from Queens who supports
sports betting, said he hoped the Gaming Commission would move
quickly to set up the program.
"There's no reason why we shouldn't be able to bet on the Super
Bowl," he said, referring to the football championship scheduled
for February 2022.
Providers will be selected based on how they would "maximize
sustainable, long-term revenue for the state," according to the
budget bill. The commission will consider a provider's proposed tax
rate, marketing plan, track record and ability to start operating
quickly, the bill says.
Mr. Addabbo and legislators had advanced a sports-betting plan
in which the state's existing commercial and tribal casinos would
be able to partner with mobile-betting companies. Mr. Cuomo
successfully pushed for a model where the state would contract
directly with a betting provider, which he said would let the state
secure a higher tax rate on wagers.
"We operate it, we get the resources," Mr. Cuomo said
Mobile sports betting is already legal in 16 U.S. states,
according to the National Conference of State Legislatures. New
York represents a major market for companies, said Daniel Wallach,
a lawyer who focuses on the regulated sports-betting and gaming
"Right now, New York is probably the grand prize given that
California is probably a few years away," he said.
New York's approach to mobile wagering drew concern from some
casino operators and other gaming analysts, who worried that
picking a small number of operators would drive bettors to other
sites that offer lower tax rates and better odds. New Jersey
charges a 13% tax on gross revenue from online sports wagers.
Jeff Gural, who owns the Tioga Downs Casino Resort near
Binghamton, N.Y., said New York's plan wouldn't generate the
revenue that was projected.
"It's the dumbest thing I've ever seen," said Mr. Gural, who
also owns the Meadowlands Racing & Entertainment complex in New
Jersey, which partners with FanDuel to offer mobile sports betting.
"I consider this a gift to New Jersey and to me at the Meadowlands,
and my only regret is that Andrew won't be around to see this
A spokesman for Mr. Cuomo didn't immediately respond to a
request for comment.
Because of strict limits on gambling activities in the New York
State Constitution, servers handling mobile sports bets must be
located at existing casinos in the state, the bill says. Providers
must pay a casino $5 million a year for hosting a server, in
addition to associated expenses.
The Oneida Indian Nation operates casinos in Central New York
and has a compact with the state, signed in 2013, in which the
tribe makes payments of roughly $70 million a year in exchange for
exclusive rights to operate gambling in a 10-county area that
includes Syracuse and Utica.
The Oneidas offer sports betting within their facilities and say
they believe online wagering operated by another party would
constitute an infringement of their compact.
"We are disappointed and believe the legislation is a step
backwards," Oneida spokesman Joel Barkin said in a statement. "It
is unfortunate that the State has chosen instead to take such an
unbalanced approach that will unnecessarily hurt our region. We
remain open to discussing workable solutions when the state is
prepared to do so."
Aides to the governor said Wednesday that providers would be
encouraged to strike revenue-sharing arrangements with tribes, and
that such agreements would be taken into account when the Gaming
Commission awarded licenses.
Representatives from mobile sports betting companies said they
were pleased with the legislation. FanDuel spokesman Chris Jones
said the company looked forward to the bidding process and "hope we
are ultimately able to bring our FanDuel Sportsbook product to
customers in our home state."
Griffin Finan, the vice president for government affairs at
DraftKings Inc., said the company looked forward to learning more
as the process unfolded.
(END) Dow Jones Newswires
April 07, 2021 16:31 ET (20:31 GMT)
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