New York's Path to Mobile Sports Betting Questionable

Written by:
Alejandro Botticelli
Published on:
Apr/09/2021

  • New York is expected to allow for two mobile sports betting master licensees with a minimum of four skins

  • The Empire State proposal would likely mirror that of the New Hampshire model, which is viewed as a monopoly

  • The Oneida Nation appears to be hinting at future legal action that would likely stop the process in its tracks

 

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Sure, New York State opening up for mobile sports gambling could be a good thing.  It could also be murky.

Joe Brennan, Jr. a long time industry analyst who helped get the ball rolling in New Jersey for that state's ultimate entry into the legal sports betting market, is more of a skeptic.

Chris Sommerfeldt and Denis Slattery of the New York Daily News were quick to mention FanDuel and Draftkings as well.

The $212 billion annual NYS budget, which was set to pass the Assembly on Wednesday before heading to Cuomo’s desk for a final signature, gives the green light for the state Gaming Commission to consider competitive bids from mobile sports betting platforms like DraftKings and FanDuel.

The commission will be rewarding at least two mobile wagering platforms "based on a scoring method aimed at boosting tax revenue for the state".

But again, the odds of those two companies being Draftkings and FanDuel are quite good. Both already operate retail sportsbooks in two of the four Upstate casinos.

“We want to thank the legislature and Governor Cuomo for the progress made in bringing legal, regulated, mobile sports betting to New York,” said Griffin Finan, Draftking's platform’s vice president of government affairs. “We look forward to learning more as the process continues to unfold.”

A company like Draftkings might be one of the few willing to fork over approximately 50% in profits to the state for tax purposes.  These costs will most certainly be passed onto the consumers. 

Sports Handle's Matt Rybaltowski believes that number could be as much as 55%.

The two license holders would then subcontract to at least four sportsbook operators in the form of skins.  Initial reports indicate there will not be a maximum imposed on the number of skins. 

Most experts, including Brennan, Jr., seem to agree that the proposed model cuts down on competition.

For those suggesting legislation could evolve, Brennan, Jr. warns against such a mindset.

Such a model mirrors that of New Hampshire where the state's Lottery has partnered with DraftKings and essentialy shut all others out of the process. 

The mobile NY sports betting language included in the state budget bill is best consumed with a stiff drink in hand, writes Adam Candee of Legal Sports Report.

Candee points to the elephant in the room, more specifically the Oneida Nation.

They issued a statement this week.

“We are disappointed and believe the legislation is a step backwards, as the State apparently expects the Oneida Indian Nation to bid for the right to offer mobile sports betting within our own 10-county zone, for which the Nation already pays the state and localities about $70 million per year for gaming exclusivity pursuant to our 2013 Settlement Agreement.

“The Nation had worked hard with multiple parties to negotiate a compromise that worked for everyone, and was approved by the Assembly and the Senate, and endorsed by all of the tribal and commercial casinos. It is unfortunate that the State has chosen instead to take such an unbalanced approach that will unnecessarily hurt our region. We remain open to discussing workable solutions when the state is prepared to do so.”

The perceived threat of future legal action looks to hang thick in the Albany air, Candee warns.

- Alejandro Botticelli, Gambling911.com

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