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American Gaming Association Supports Customer Choice For Mobile Sports Betting In New York

U.S. casino trade group prefers multiple-brand system for online sports wagering in Empire State

Matt Rybaltowski by Matt Rybaltowski
February 1, 2021
in Regulation
New York Capitol Building
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As the gambling industry works feverishly to rebound from the unprecedented circumstances brought about by COVID-19, the American Gaming Association has turned to mobile sports betting as a key driver for fueling the recovery.

Since New York Gov. Andrew Cuomo reversed his policy on online sports wagering at the start of the year, developments in the Empire State on a mobile sports betting regime have dominated gambling coverage nationwide. With a population hovering around 20 million residents, New York will likely become the largest market in the nation for mobile once the state expands legal sports betting beyond a retail-only environment. Other heavyweights such as California, Florida, and Texas have yet to legalize sports wagering.

But Cuomo has proposed a public-private partnership for the activity under a system where the New York State Gaming Commission will contract with a sportsbook operator, or multiple companies to run mobile sports betting across the state. When Cuomo unveiled the proposal earlier this month, the plan sent shockwaves throughout the industry with a provision that signaled the commission could award the contract to a single operator. The administration later modified the statement, opening the possibility for multiple mobile sportsbook operators to contract with the state.

β€œA marketplace that involves more participants is better than one that is a sole-sourced one,” American Gaming Association President and CEO Bill Miller said Thursday in response to a question from Sports Handle.

A massive opportunity

Despite the COVID-19 pandemic, the sports betting industry is coming off a stellar year driven largely by the pent-up demand for live sports after a lengthy freeze in the spring. In Thursday’s 2021 gaming forecast, Miller noted that U.S. sports betting handle likely eclipsed $21 billion last year with about 82% of all wagers placed on online platforms since last March. In New Jersey, bettors wagered approximately $6 billion on sports during the calendar year, translating to $393.2 million in gross gaming revenue (GGR). New Jersey bettors closed the year on a high note, placing a U.S. monthly record of $996.3 million in December.

Proponents of mobile sports betting in New York argue that the size and scope of the market will dwarf that of its New Jersey rival. Based on population data, New York Assemblyman J. Gary Pretlow believes New York could more than double New Jersey’s monthly handle. Prior to the Supreme Court’s historic PASPA ruling in May 2018, the AGA pegged the size of the U.S. underground market as a $150 billion a year opportunity. A more conservative forecast from Bank of America projects the total addressable market for U.S. sports betting in 2030 at $30 billion, with a 4% market share for New York.

NEW: @BillMillerAGA delivered remarks today previewing gaming’s road to recovery and outlining the AGA’s 2021 priorities in Washington, DC and beyond. Find full details on the AGA’s singular 2021 agenda of accelerating the industry’s recovery. ➑️ https://t.co/PCUwCxU7sP pic.twitter.com/V2RqtDATC5

— American Gaming Association (@AmericanGaming) January 28, 2021

When it comes to the legalization of sports betting, the AGA has continually reiterated its goal of converting bettors from the underground illegal market to a legal, regulated one.

“Any legal option is preferable than the pervasive and predatory illegal market, so we’re encouraged that Governor Cuomo has changed his position on mobile gaming,” said Casey Clark, senior vice president for strategic communications at the AGA.

“However, competition helps create customer-focused, innovative marketplaces that can effectively stifle the illegal market and generate much-needed tax revenue,” Clark wrote in an email to Sports Handle. “This is true in the neighboring states of Pennsylvania and New Jersey that New Yorkers are crossing state lines to place wagers in.”

The AGA is a national trade group representing the $261β€―billion U.S. casino industry, which supports about 1.8 million jobs nationwide.

Countering a monopolistic structure

Miller prefaced his comments Thursday by asserting that he did not want to ruffle any feathers with Cuomo’s office. After all, the industry faces weeks of possible contentious negotiations with the state on the parameters of a mobile betting structure in New York.

Cuomo has proposed a model that would give the state a larger percentage of the revenue pie than the structures in place in states such as New Jersey, Nevada, and Illinois. The model draws comparisons to a revenue-sharing arrangement in New Hampshire, where theΒ state lottery awarded an exclusive contract to DraftKings for sports betting.Β New York State Budget Director Robert Mujica believes the system could generate approximately $500 million for the state in a fully mature market, compared with around $50 million under the New Jersey model. Conversely, detractors argue that state-run systems generate far less than the traditional models throughΒ  a measure known as the handle per adult metric.

NEW YORK:

Gov. Cuomo included mobile sports betting in his fiscal year budget proposal, but questions persist on the market structure in New York.

β€œWe want the actual revenue from the sports betting."

(by @MattRybaltowski)https://t.co/ZF7jBdYNU3

— Sports Handle (@sports_handle) January 19, 2021

A bill authored by New York Sen. Joseph Addabbo Jr. calls for up to 14 skins or licenses that allow sportsbooks to contract a mobile sports betting platform to an independent operator. In order to be eligible for the state’s mobile sports betting contract, Cuomo’s proposal requires a sportsbook to partner with one of New York’s four existing commercial casinos.

Miller indicated Thursday that he is amenable to meeting with Gov. Cuomo’s staff, adding that he has had numerous discussions with state governors and legislative leaders during the pandemic to advocate for the interests of the gaming industry.

“I would be more than open to having dialogue with the Governor or anyone else in Albany to further a sports betting regime that allows customers the greatest number of choices,” Miller said.

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Matt Rybaltowski

Matt Rybaltowski

Matt is a veteran writer with a specific focus on the emerging sports gambling market. During Matt's two decade career in journalism, he has written for the New York Times, Forbes, The Guardian, Reuters and CBSSports.com among others. In his spare time, Matt is an avid reader, a weekend tennis player and a frequent embarrassment to the sport of running. Contact Matt at [email protected]

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