New York Governor Andrew Cuomo announced his proposal to legalize sports betting prior to his 2021 State of the State address on Monday.
One Online Sports Betting Operator
New York Governor Andrew Cuomo unveiled Wednesday his proposal to authorize mobile wagering as part of the 2021 State of the State address Monday 11. The proposal comes as New York faces an estimated $15 billion deficit and the rise of positive Covid-19 cases. As uncertainty grows regarding how the state will go into 2021, with the nation facing unrest following the recent riots at the US Capitol and state houses, Governor Cuomo released fewer proposals prior to his speech than in the past years.
Under the proposal, the New York Gaming Commission will issue request-for-proposal (RFP) to choose and license one single sports betting operator or online platform to provide mobile sports betting in the state. A partnership with one of NY-licensed retail casinos and protection against problem wagering and abuse are required by the Commission to be selected.
Keeping Millions “At-Home”
“New York has the potential to be the largest sports wagering market in the United States,” Governor Cuomo declared in a statement. New Yorkers bring about 20% of New Jersey’s yearly wagering handle and travel to other neighboring states where sports betting is legal, such as Pennsylvania. A fact the Governor addressed last week: “At a time when New York faces a historic budget deficit due to the Covid-19 pandemic, the current online sports wagering structure incentivizes a large segment of New York residents to travel out of state to make online sports wagers or continue to patronize black markets”.
He announced that the government “[aims] to keep millions of dollars in tax revenue here at home” to boost its recovery from the pandemic. At the end of 2020, Governor Cuomo hinted that he would move forward with legalizing online sports wagering and marijuana to improve the NY state budget. The legalization of recreational cannabis, which Governor Cuomo has been supporting since 2018, is expected to bring over $300 million in tax revenue.
The State’s Staggering $15 Billion Budget Deficit
New York’s budget started last year with a $6 billion deficit, which skyrocketed by about $9 billion to $15 billion during the pandemic. Governor Cuomo and other lawmakers said more federal stimulus aid is crucial to fix the state budget. If not, New Yorkers may face tax increases, furloughs, and early retirements. According to Governor Cuomo, the state could increase taxes even with federal aid.
Despite his support for mobile sports betting, Governor Cuomo was criticized over his proposal to operate sports betting via the state lottery instead of commercial casinos. States that chose the retail system, like New Jersey and Pennsylvania, seem to have been more successful than those with the lottery system, as Washington DC’s lottery run mobile betting platform GameBet generated three to five times less betting than William Hill‘s retail sportsbook launched in DC.
The model chosen by Governor Cuomo could yield up to $500 million in tax revenue per year, against $50 million through retail sports betting, Budget Director Robert Mujica said. However, New York’s state constitution does not currently allow legalizing sports betting with a lottery model, and must be amended for it to happen.