What are the odds of sports betting in NYS?

May 30, 2019

It has been a year since the U.S. Supreme Court struck down a 1992 federal law prohibiting sports betting in most states. The PASPA (Professional and Amateur Sports Protection Act) decision - as it is called - opened the door to a new multibillion-dollar revenue stream that states have been exploring aggressively since, but a number of legal questions kept it from New York's budget this year. Here is a look at where the issue stands.

There are sports betting bills pending in both the state Assembly and Senate. Each would authorize bets on mobile devices and eventually at sports venues. Traditionally, there's been less enthusiasm in the Assembly than Senate, where Joseph Addabbo, a Democrat from Queens, chairs its Committee on Racing, Gaming and Wagering.

New York State Sen. Joseph Addabbo speaking at the latest sports betting hearing in Albany.
Credit New York State Senate

"We can sit on the sidelines and we can do nothing about sports betting in our state and we can continue to watch other states really progress. Jersey has done phenonemally well and, like I said, some of that is our residents going there. Or we can do sit and watch it go by or we can do something about it and I remain optimistic that we can do something about it this session," Addabbo said.

However, speaking to public radio this week, Gov. Andrew Cuomo said it is not even in the Top 10 of his to-do list this session.

"Uhhh, it's possible. It's possible," Cuomo told WAMC in Albany. "I think the time is short and the list is long, so I would counsel the legislative leaders, get the priorities done."

There are outright opponents who say more gambling will lead to more addiction, but like most issues, the push is on by advocates because of the money in play.

The status of sports betting nationally, as of May 27, 2019.
Credit American Gaming Association

Las Vegas-based gaming strategist Chris Grove of Eilers Research told a recent Senate hearing he estimates the stakes at $1 billion annually. The biggest chunk of change would come from mobile betting.

"At maturity, we mean when the market has exited the phase of rapid initial growth or somewhere between three and six full years after launch," said Grove. "Critically, some 95 percent of that revenue or roughly $973 million would be generated from online sports betting."    

New York-based FanDuel, the largest online gaming operator in the United States, estimates the first year to generate more than $150 million in taxes and licensing fees alone. That is money advocates say could go toward education, roads and bridges, lowering taxes and the like.

However, Indian nations, like the Senecas, are currently holding an inside straight.

From the tribal compact between the Seneca Nation and New York State.
Credit Seneca Nation of Indians

"Under tribal state compacts or other agreements with the State of New York, tribes enjoy exclusive gaming privileges over a large portion of the state," said Sarah Walters, a former U.S. Interior Department and National Indian Gaming Commission attorney who specializes in federal tribal law. "Due to their wide exclusivity zones, tribes could block mobile sports betting throughout most of Upstate New York and, if commercial operations were to accept wagers from within those zones, tribes could limit or completely omit payments made to the state made in exchange for that exclusivity, which risks a significant amount of revenue to the state."

One way around that is supported by the four commercial casinos where betting will be allowed on site as soon as next month, when a public comment period on proposed rules by the state Gaming Commission ends.

Tom Wilmott, a partner in del Lago Casino in Waterloo, NY, explained Addabbo's recent amendment.

"To voluntarily opt in to mobile sports betting on a commercially regulated basis. In our view, this is a very creative solution to address a web of complicated issues, which involve federal law, the state constitution, sovereign immunity and gaming exclusivity and we support those new provisions," Wilmott said.

If a nation opts in, its compact with the state would not apply to the sports betting portion of its business.

Credit Seneca Nation of Indians

In a statement to WBFO, the Seneca Nation said it is exploring impacts and options to participate in "this popular and potentially lucrative" new business. They are glad to have been included in Addabo's bill.

Still, the governor contends there are constitutional issues to address.

"All forms of different types of sports betting have been prosecuted as gambling. I don't think anyone can honestly argue that casino gambling does not include sports betting. So that takes care of the first constitutional question," said Jeff Ifrah, a Washington, D.C. criminal defense attorney who specializes in e-gaming. "The second question is, when you offer mobile wagering statewide, is that wagering occuring at the casino or not? Other states that have looked at this have resulted the same way: as long as the servers are at the casinos, then therefore the wagering is taking place at the casino."

On the other side of the coin are professional athletes, who want clear and enforceable legal standards to protect the people being bet on. NFL Players Association Counsel Joseph Briggs spoke recently on behalf of national football, hockey, baseball, basketball and soccer league players.

Credit New York State Senate

"One thing I'll say to you is that a comprehensive review of your criminal code, to make sure that people who are participating in sports gambling know where the boundaries are and how they can interact with their athletes not only in stadiums, as reflected in your bill, but also as they leave the stadium, and how they may try to influence that person through the conversations they may have, with the intimidations they might try to include as part of that conversation," Briggs said.

A letter on behalf of the Buffalo Bills, New York Giants and Jets and the NFL also asks the state to consider substantial protections for league and team content and intellectual property, fan access to official league data, as well as adequate resources and penalties to eliminate illegal betting. Briggs also suggested safeguards - perhaps "whistleblower protections" - to keep confidential the non-public information that is accessible to referees, coaches and front office staff, including practice and injury reports.

By addressing these challenges, the odds of all this legalese being sorted out by next state budget are getting better.