Citing the unprecedented impact of the COVID-19 pandemic on the gaming environment in the Empire State, the New York State Gaming Commission announced Monday that it has granted an extension to Spectrum Gaming Group for the submission of a closely watched state gaming-market study.
On Monday, following months of anticipation, Spectrum Gaming Group was scheduled to submit the final report of the study to the commission amid intense debate on the future of mobile sports betting in New York. Spectrum Gaming, a non-partisan consulting group that focuses on the economics, regulation, and policy of legal gambling, won the right to conduct the study last November after beating out two others. Two months earlier, the Gaming Commission devoted a small paragraph to mobile sports betting in a 157-page Request For Proposals (RFP).
“The potential impacts of this pandemic on the future of existing gaming and its implications on future development need to be fully considered,” New York State Gaming Commission spokesman Brad Maione wrote in an email to Sports Handle. “Accordingly, we have agreed to provide the additional time necessary to fully measure this issue.”
No timetable has been established for a new deadline, Maione said.
Sitting idly on the side of the road
Given the scope of the market, New York’s inability to reach a consensus on mobile sports betting has drawn widespread criticism from gambling advocates. Since the repeal of PASPA two years ago, neighboring New Jersey has established itself as the market leader for mobile betting. Last year, New Jersey’s handle eclipsed $4.5 billion while the state’s legal sportsbooks generated revenue of almost $300 million. The windfall translated to roughly $36 million in tax revenue for the state.
Op-ed from Matt King, CEO of FanDuel:
"It strikes me as absurd that New York state is forcing our New York customers to travel out of state to engage in [legal sports betting] — and losing tens of millions in tax revenue at the same time." https://t.co/u1hSuw2Bbe
— Daniel Wallach (@WALLACHLEGAL) February 28, 2020
In February, prior to the coronavirus outbreak, New Jersey reported a handle of $494.8 million with approximately 88% of wagers placed online. It represented the sixth consecutive month the handle in the Garden State exceeded $400 million. While New Jersey has become the standard across the country for establishing a vibrant online marketplace, New York Sen. Joseph Addabbo Jr. has taken the governor’s office to task for its perceived antipathy toward mobile sports betting.
Addabbo, chairman of the Senate Racing, Gaming and Wagering Committee, initially estimated that mobile sports wagering could bring the state $60 million in licensing fees along with an additional $30 million in annual tax revenue. At a gambling conference in November, Addabbo asserted that mobile sports betting could bring New York $100 million in revenue in the first year of online sports gaming.
At present, New Jersey, Pennsylvania, and Rhode Island have legal sports betting while lawmakers in Connecticut, Massachusetts, and Vermont are seriously discussing it. Last year, four upstate New York casinos received the green light from the state to offer on-site sports betting.
While other states demonstrate progress in adopting mobile, Addabbo has compared his state to a vehicle stalled on the side road as his competitors race by in the left lane.
Last spring, weeks before the end of the legislative session, Addabbo commissioned a hearing on the future of mobile sports betting. One panelist, Chris Grove, partner at Eilers & Krejcik Gaming, an independent research firm based in Irvine, Calif., told the committee that a mature market in New York could generate more than $1 billion in revenue each year. Grove said the market would reach full maturity in three-six years and estimated 95% of revenue would come from mobile platforms.
Spectrum reportedly failed to deliver a rough draft of the report on time for an April 1 deadline. Spectrum Managing Director Michael Pollock directed all questions to the Commission.
Budget shortfall
Weeks after the pandemic hit New York, a COVID-19 Economic Analysis prepared by the state found that New York will fall about $13.3 billion short in projected tax revenues for the current fiscal year. The shortfall could swell to approximately $61 billion by fiscal year 2023-24, Gov. Andrew Cuomo said in April.
“I think that no state would ever deny significant revenue, no matter what the fiscal situation is, if you can find a way of legally raising revenue, in this case through mobile sports betting,” Addabbo told Sports Handle on Monday afternoon.
When asked Monday whether the harsh economic conditions could prompt the governor to reconsider his position on mobile sports betting, a Cuomo spokesman did not immediately respond to a request from Sports Handle.
I thought so. Let’s do this ! Revenue, educational funding, jobs and improved problem gaming programs. #BetOnNY https://t.co/6NZ35a6TVV
— SenatorJoeAddabbo (@SenJoeAddabbo) February 1, 2020
Cuomo’s office has reiterated that a constitutional amendment is needed to legalize mobile sports betting in New York. That could take at least 36 months because a constitutional amendment must be approved by two consecutive sessions of the state legislature before it can go to the voters.
Both Addabbo and Assemblyman J. Gary Pretlow recommended the inclusion of mobile betting in the state budget, but Cuomo didn’t include it.
