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Overview: Online Sports Betting in New York

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Overview: Online Sports Betting in New York

New York legalized sports betting in 2019 but only allowed retail sports betting. Online sports betting remains illegal, which is likely setting the sports betting industry in New York back. In many states, online sports betting dwarfs retail sports betting. Part of that trend is driven by the pandemic. Who wants to go outside to gamble when you can do it safely from your couch?

But it’s popular during normal times, too. You can imagine being at a watch party and competing to see who can win the most money on a day of games. New York’s rejection of online sports betting may seem puzzling to sports betting proponents. However, it’s not opposition to sports betting that kept online gaming from New York. It was legal and constitutional concerns.

What Online Sports Betting Could Do For New York

Sports betting was originally a way to help reduce New York’s budget deficit. Its budget deficit is projected to hit $17 billion next year. New York was already running a deficit before the pandemic. However, their early struggles with the coronavirus and the ensuing lockdowns made correcting that deficit harder.

Sports betting may have cushioned the blow. But New York’s sports betting industry isn’t making enough money to put a serious dent in the deficit. Here’s how much money New York’s sports betting industry made in the same ten months as New Jersey’s:

New York $9,646,708
New Jersey $273,436,129

New Jersey’s sports betting industry made over 28 times more than New York’s. New Jersey isn’t keeping $273 million – it still has to be taxed. But a tax on $273 million is better than a tax on $9.6 million. What’s New York’s missing piece? Well, there are two: market maturity and online sports betting.

New York’s sports betting industry is young and immature. It only has four retail sportsbooks. That’s limited compared to New Jersey’s gaming market, which includes:

  • Retail sportsbooks
  • Online sportsbooks
  • Retail casinos
  • Online casinos

New York has a long way to go before reaching New Jersey’s revenue levels – if it ever does. But New York doesn’t have to go all the way to legalizing online casinos to create a profitable industry. It just needs to double down on the most profitable part of the sports betting industry: online and mobile sports betting.

So Why Didn’t New York Legalize Online Sports Betting?

Although interested in finding new revenue sources, Governor Cuomo wasn’t sure online gaming would be legal in New York. New York’s state constitution prohibits gambling. However, each new type of gambling was added to the state constitution as an amendment. That way, every form of gambling allowed in New York was banned except for the ones with their own amendments:

1939 Pari-Mutuel Betting on Horse Racing
1957 Religious, Charitable, and Non-Profit Bingo
1966 State Lottery for Education
1975 Religious, Charitable, and Non-Profit Games of Chance
2013 Retail Casinos

All of New York’s gaming needed constitutional amendments to pass. So, why didn’t sports betting need one?

Technicalities and Other Legal Nonsense

Sports betting came to New York because it was already in the 2013 amendment. The amendment’s text included bookmaking as an activity that the legislature could legalize – and New York did so in 2019. By limiting sports betting to New York’s casinos, legislators avoided conflicting with the state constitution.

But mobile sports betting was a thornier issue. The amendment’s text didn’t provide for online or mobile sports betting. That issue was at the forefront of Governor Cuomo’s hesitation to legalize online sports betting.

However, Senator Joseph Addabbo introduced a bill that would legalize online sports betting anyway. He believes that the constitutionality issue can be fixed with some minor planning. To get around the constitutionality issue, he proposed putting the servers that process bets inside the casinos. That way, it’s a casino activity just like the 2013 amendment said. It would prevent the legislature from having to not only go through the long process of amending the state constitution. It would also prevent a referendum that New Yorkers would have to vote on.

Is Online Sports Betting Coming to New York?

Not yet. New York’s 2021 budget puts no money into mobile sports betting. It’s the same as Governor Cuomo saying he’s not doing it. However, there are efforts to try to bring mobile sports betting to New York anyway. Legislators can return to session and try to rebalance the 2021 budget. Adding mobile sports betting into the budget would in effect legalize online sports betting in New York. However, it’s unclear whether that means Senator Addabbo’s bill would pass or whether debate on the bill would resume. It’d be a bold move, but with a majority, they may be able to put some money into mobile sports betting.

However, Governor Cuomo has a line-item veto that he can use on budget bills. In response, the legislature can override his veto. Both chambers need a two-thirds majority to do it, making deal-making and compromise a critical factor in whether online sports betting comes to New York.

It’s too early to say whether sports betting proponents will get mobile sports betting into the budget. Key legislators haven’t publicly taken sides yet. However, getting mobile sports betting past Governor Cuomo will be challenging without convincing him out of the constitutionality issue.

But if you’re a New Yorker – and willing to brave the pandemic at the casinos – you can read up on sports betting basics. But if you’re waiting for mobile options, you’ll have to wait in limbo with us to see how New York’s political drama unfolds.

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