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.

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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.

Mobile sports betting in New York is not legal statewide yet. If you are on the premises of an upstate NY casino, you can use your mobile device to place a sports bet. There are currently. Jan 06, 2021 ALBANY — Gov. Cuomo is finally willing to wager on mobile sports betting. The governor, who has long pushed back against legalizing online sports betting, will make the revenue-generating measure a. Jan 06, 2021 Cuomo had previously contended that the legalization of online sports betting would require a constitutional amendment and remained opposed to mobile wagering for much of 2020, a position that. Jan 25, 2021 ALBANY, N.Y. (NEWS10) — While Gov. Andrew Cuomo has a proposal to legalize mobile sports betting in New York, one group of lawmakers has had their own legislation to do so that’s garnered. New York Governor Andrew Cuomo announced legislation to authorize mobile sports wagering — sending shares of at least two companies higher Wednesday. Sports betting company DraftKings was up.

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.”

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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.”

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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.

With New York facing a $15 billion budget shortfall from the coronavirus pandemic, online sports betting is viewed as one possible way to inject much-needed money into the state. New Jersey legalized online wagers in 2018, and earlier this month, Governor Andrew Cuomo included an online professional sports betting plan in his executive budget proposal that he claimed would raise $500 million in revenue for the state.

But many logistical hurdles remain. Cuomo’s proposal for legalization runs counter to what the Democratic supermajority in the state legislature is pitching. Some authorities are questioning the legality of the whole enterprise. And there are lingering concerns about gambling and addiction, particularly with the number of people sequestered at home and the opportunities that could be suddenly available to lose significant amounts of cash.

“I don’t see the governor’s proposal as workable in New York,” said Assemblyman Gary Pretlow, the chairman of the Committee on Racing and Wagering.

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Right now, you can place horse racing bets on your smartphone through an app run by the not-for-profit corporation that oversees horse racing in New York’s three major tracks. Mobile betting for professional sports could theoretically function in a similar way. Currently, the servers for horse betting are located at the racetracks.

In both Cuomo and the legislature's proposals, the servers for mobile sports betting would be situated at places where bets are already taken, like casinos. The major overriding question is how many operators, or “skins,” as they are called in the industry, there will be, and who will get to profit.

Under Cuomo’s proposal, which still needs to be fleshed out further, the New York State Gaming Commission would be directed to solicit bids for a small number of mobile sports wagering operators. The system would be akin to how the state-run lottery functions, with possibly only one or a small number of operators overseeing sports betting. A single operator runs online sports betting in New Hampshire, Oregon, Rhode Island and the District of Columbia. Overall, sports betting is now legal in more than two dozen states.

Robert Mujica, Cuomo’s budget director, said earlier this month that the advantage of the state proposal would be the ability to maximize tax revenue. “The fundamental question is: if you want to support the bottom line for casinos or New York’s students. And the governor’s proposal chooses students,” Mujica told the Wall Street Journal. (An identical statement was sent to Gothamist from Freeman Klopott, a budget spokesman for Cuomo.)

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It’s not clear yet what Cuomo’s tax rate would be for his online betting model, though Mujica has asserted that it would be enough to raise $500 million a year. The state legislative proposal, co-sponsored by Pretlow and the chairman of the State Senate’s Racing and Wagering Committee, Joseph Addabbo, puts the number closer to $100 million annually.

At first glance, that would seem to make Cuomo’s proposal the better one, given the potential for serious state budget cuts without new forms of revenue. But lawmakers and some gambling industry insiders aren’t so sure. In New Jersey, which is generally viewed as a success given the number of people who place bets, there are as many as 17 legal online sportsbooks.

New York’s legislature is looking to take a similar approach, believing their proposal has a better opportunity for growth—more operators can lead to more options for consumers and more interest in placing bets. Addabbo calls his legislation “inclusive,” because it would also allow for Native American casinos, casinos on state property, and off-track betting sites to participate.

“Competition bodes better for our residents and will drive up revenues than being a narrow state-run lottery kind of system,” Addabbo argued. “New York finds itself in a very odd position not being a leader. We are outside looking in. New York right now is a three-wheeled car limping along in the right lane. New Jersey and Pennsylvania are speeding by us.”

Bennett Liebman is a government lawyer in residence at Albany Law School who previously advised Cuomo as the deputy secretary for Gaming and Racing. He said the difference between the two models is a question of what is being prioritized: more tax revenue, or a better model, long-term, for consumers and gambling interests?

“It all depends on what you want in your market. If you want what the governor is seeking, which the draft is very general, you are looking for maximum tax revenue, you will give it to one or two groups and you are going to tax them at a very high rate,” Liebman said. “If you are looking to create a robust market to help out casinos and consumers, then you go with, or you are more inclined to go with, the legislative plan.”

Liebman called the Cuomo administration’s $500 million revenue figure for online sports betting “very, very high,” and predicted a few operators would dominate the space in New York, like DraftKings and FanDuel have done in New Jersey. Casinos, racetracks, and online gambling in total generated a little more than $300 million in tax revenue for New Jersey in 2020.

Even if New York reached Cuomo’s projections—let alone the far smaller figure from the state legislature—online sports betting would represent only a minuscule fraction of a state budget that was $177 billion last year. One question hanging over the debate is whether the united front fighting for mobile sports betting in New York—the currently existing casinos, and operators like DraftKings and FanDuel—would crumble if only a small number of them were selected to make money from sports betting.

According to a constitutional amendment passed in 2013, sports wagering in New York is currently allowed only in physical portions of its four existing commercial casinos and other facilities operated by Indian tribes. Cuomo and supporters of online sports betting believe their proposal will meet the requirements of the state constitution by locating the servers for the betting websites at the physical casinos.

Neil Murray, an Albany attorney who has sued to oppose gambling in the state, said there was a “legitimate, serious question” about the constitutionality of online sports betting.

“The problem right now is the constitutional amendment that was passed several years ago does carve out exceptions for gambling at casinos. The operative word is ‘at’ and what does that mean?”

Murray argued the way the amendment was proposed—an economic stimulus for destination casinos that would prevent the proliferation of gambling statewide—contradicts the arguments made for mobile sports betting today. “If you allow online gambling and people can gamble from their living rooms, then of course that destroys the whole purpose on which gambling was authorized on a limited basis to begin with,” he said. “Everybody is counting on collective amnesia.”

Pretlow, the state assemblyman, contended that his bill met the requirements of the state constitution but Cuomo’s would not if it chose to operate like the state lottery. The lottery is regarded as a game of pure chance with no skill involved, allowing it to circumvent a longtime prohibition on gambling in the state.

“The lottery has to be 100 percent chance. The lottery is not gambling,” Pretlow said. “It’s flip a coin, heads or tails, nothing in the middle. I think if the lottery were to handle sports betting, it would lead to a constitutional question.”

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