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No Details On Spectrum New York State Gaming Study, And Mobile Still At Standstill

Deadline for gaming study today, as lawmakers continue to wrestle with budget

Matt Rybaltowski by Matt Rybaltowski
April 1, 2020
in Regulation
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The future of mobile sports wagering in one of nation’s largest markets remained uncertain early on Wednesday, as New York lawmakers failed to complete a state budget before a midnight deadline.

On Wednesday afternoon, Governor Andrew Cuomo delivered his daily COVID-19 briefing from the State Capitol building in Albany as the legislature worked feverishly to pass a timely budget. At the same time, Spectrum Gaming Group was scheduled to submit a closely watched gaming market study to the New York State Gaming Commission in time for Wednesday’s deadline, five months after the advisory group secured a bid to conduct the comprehensive study.

While New York leaders appeared to make significant progress as negotiations dragged into the wee hours of Wednesday morning, it is highly unlikely that mobile sports betting will receive inclusion in the state budget for the second consecutive year. The public will also have to wait a few more weeks before it receives Spectrum’s take on the prospects for mobile in New York. The final report is due June 1.

“There will be no release of the findings in the Draft Report,” New York State Gaming Commission spokesperson Brad Maione wrote in an e-mail to Sports Handle.

Mired in controversy

The commission declined to comment further on the mobile sports betting findings in the draft.

More than any jurisdiction across the nation, New York has been placed under the microscope for its inability to legalize online sports gambling. A last-ditch attempt to bring mobile sports betting to New York failed last June when the state assembly declined to take up a vote on a bill that passed overwhelmingly in the Senate.

Cuomo has continually taken the position that a constitutional amendment is needed to legalize the activity. The pathway, however, requires a time-consuming process that could take a minimum of 36 months. Under state law, a constitutional amendment must be approved by two consecutive sessions of the state legislature before it appears on a statewide referendum the following year.

Online sports betting received scant mention in a 157-page Request For Proposals (RFP) issued by the gaming commission last September. Two months later, Spectrum Gaming was awarded the Gaming Market Study, beating out two others.

The Successful Bidder will be expected to provide a detailed report providing the
resulting analysis of the New York State gaming market. This will include, but may not
be limited to the following:

Analysis of the potential market for other gaming and the impacts of each on
the existing gaming markets, including:
1. Sports wagering, only at commercial casinos;
2. Sports wagering expanded to video lottery gaming facilities and offtrack betting facilities; and
3. Online sports wagering, lottery and video poker;

NOTE: The report shall clearly indicate these analyses presume that a
Constitutional amendment has passed authorizing such activity. — Section 3.2 (F), New York Gaming Commission Gaming Market Study Request For Proposals

Senator Joseph Addabbo Jr., chairman of the Senate’s Racing, Gaming and Wagering Committee, has sought to find a legal avenue for the expansion of mobile sports gambling in New York without resorting to a constitutional amendment. As New York leaders struggle to reach a consensus, its neighbors in New Jersey have developed one of the nation’s most vibrant online sports betting markets. Three of New York’s six border states — New Jersey, Pennsylvania and Rhode Island — have legal sports betting, and lawmakers in Connecticut, Massachusetts and Vermont have been seriously discussing it.

In February, New Jersey’s handle of $494.2 million marked the sixth consecutive month the Garden State eclipsed the $400 million threshold. New Jersey bettors wagered $436.5 million online, representing 88% of the total handle. Last November, Addabbo estimated that New York could generate approximately $100 million in revenue and additional licensing fees during the first year of legal, online sports betting.

Addabbo has used a traffic analogy to air his grievances on mobile betting, likening New York to a vehicle under maintenance on the side of the highway, while others race by in the left lane. The comparison also has a twinge of irony considering the high rate of New Yorkers that have traveled across the George Washington Bridge to place bets on their smartphones before quickly returning to Manhattan.

NY will be stuck like a disabled car on the shoulder, while we allow an illegal sports betting business in our state thrive and idly watch other neighboring states pass us up with enormous revenue gains from mobile sports betting.

— SenatorJoeAddabbo (@SenJoeAddabbo) June 19, 2019

Last year, four upstate New York casinos were able to begin offering sports betting under existing law. At the moment, every casino in the nation is temporarily closed due to the spread of COVID-19. While top sportsbooks currently offer mobile wagering during the shutdown, the betting options have been limited to niche sports such as table tennis, sumo wrestling and Australian Rules Football, among others.

Spectrum’s role

Spectrum Gaming Group is a non-partisan consulting group that focuses on the economics, regulation, and policy of legal gambling worldwide. The Spectrum Gaming Sports Group conducts a range of sports betting services including: market projections, public policy advisory, consulting on land-based and online sportsbook operations, technology requirements and RFP development for prospective states.

Spectrum's Mike Pollock discusses lessons from US #sportsbetting that are relevant for Brazil as it considers legalization, at the Online Gaming Summit Brazil in Sao Paolo. pic.twitter.com/PPp5Cli8fv

— Spectrum Gaming Group (@SpectrumGamingG) December 9, 2019

Prior to the launch of sports betting in Rhode Island, Spectrum wrote an RFP for the Rhode Island Lottery outlining the qualifications for the state’s sports betting service provider. Rhode Island added mobile sports betting in August 2019, nine months after becoming the eighth U.S. state to accept legalized sports bets in the wake of the Supreme Court’s historic PASPA decision.

Spectrum also published a 50-page report on the prospects of sports betting in the District of Columbia in December 2018. The report, titled Sports Betting In District of Columbia: Analysis and Business Case of the Economic Impact of Regulating and Operating Sports Betting through the DC Lottery, was submitted to the District’s Office of the Chief Financial Officer days after the D.C. Council legalized sports betting.

For the New York study, Spectrum could offer insight on how the introduction of mobile betting could bring a wave of new players into the market, in turn bolstering economic activity. For the D.C. study, Spectrum determined that an estimated “65% of total sports betting gross gaming revenue,” would be derived from a new mobile/digital channel, a level the advisory group found to be “consistent with developed sports betting markets elsewhere.” Spectrum devoted a lengthy section in the report to the ramifications of mobile betting on new player development.

Sports betting offered on a mobile platform could be an ideal channel to create new
players. Research shows that younger, educated, urban and higher-income groups – all attributes
to be found in the DC market – have the highest ownership and usage patterns of smartphones,
devices which are ideally suited to the preferred usage patterns of sports-betting players in other
developed sports-betting markets, and precisely the demographic the DC Lottery is aiming to
attract through offering sports betting via a mobile channel. — Spectrum D.C. Gaming Study

When asked to comment on the initial mobile sports betting findings in the New York draft report, Spectrum Managing Director Michael Pollock directed all questions to the state’s gaming commission.

Delivery of the second draft of the Gaming Market Study is due May 1.

 

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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 matt@usbets.com.

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If you or someone you know has a gambling problem, crisis counseling and referral services can be accessed by calling 1-800-GAMBLER (1-800-426-2537) (IL). Gambling problem? Call 1-800-GAMBLER (MI/NJ/OH/PA/WV), 1-800-9-WITH-IT (IN), 1-800-522-4700 (CO), 1-800-BETS OFF (IA), 1-888-532-3500 (VA) or call/text TN REDLINE 1-800-889-9789 (TN).
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