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Governor’s Comments on Mobile Sports Betting Miss the Mark

Published: April 10th, 2019, 14:15pm CEST

Heading into 2019, New York looked like a no-brainer to become the largest legal sports betting market in the United States. After coming tantalizingly close to passing sports betting legislation in 2018, it seemed like a lock that the legislature would step up and finish what they started. But so far, uncertainty and second-guessing have kept them from making quick work of this, and a lot of this negativity is coming directly from the Governor’s Office in Albany.

Recently, New York Governor Andrew Cuomo took to the airwaves and registered his grievances with the NY Legislature’s proposals to legalize mobile sports betting. But his rationale for disapproval of sports betting simply doesn’t hold up to scrutiny.

Cuomo Statement 1: “We have sports betting that you can do through a casino and we are trying to support our casinos, which, you know, we did primarily upstate as an economic development vehicle. This would help fortify the upstate casinos.”

It’s a nice sentiment, but giving these upstate casinos a monopoly on sports betting is not going to appreciably increase business for them or anyone else in the state of New York. The idea that New Yorkers will drive deep into the Catskills and stand in line at a casino sportsbook every time they want to place a bet is laughable, especially when they can reach for their mobile device and place a bet on a website or a local bookie. And most New Yorkers seeking a sportsbook experience are only minutes from the Meadowlands, where a vibrant and lucrative sports betting ecosystem has transformed the once-struggling track into a full-fledged entertainment destination. Restricting sports betting to resort casinos is a gift to three groups: offshore casinos, local bookies, and the state of New Jersey.

The better alternative would be to allow these resort casinos to partner with mobile operators to bring convenient sports betting to the rest of the state. That way, your product reaches millions more customers and increases your revenue potential exponentially. It could also drive an increase in casino visits by allowing casinos to cross-market to a previously untapped market.

Cuomo Statement 2: “New Jersey has sports betting, it’s on TV all the time. You can’t turn on the darn TV without seeing it.”

Sports betting companies injecting millions into the local economy is a bad thing? Increased ad spend is an indication of a healthy and competitive industry taking root. New Jersey has had mobile sports betting for less than a year, so any initial boom of advertising is not likely to become the new norm. Of course, this “problem” could also be easily curtailed through statute or regulation, and in fact the NY legislation does restrict ads aimed at underage and vulnerable populations. In the UK, advertising restrictions have been used effectively to keep gambling advertisements in their lane, and only during evening hours.

Cuomo Statement 3: “Sports betting, first of all, does not make you that much money. They (New Jersey) raised something like $13 million dollars… $13 million dollars is a rounding error in our state. So I don’t even think the economic benefit is there.” One might think that the Governor of a state facing a $2.3 billion shortfall would be less dismissive of a proposal to in bring tens of millions in tax revenue and create potentially hundreds of jobs in the tech and hospitality industries. New Jersey could bring in as much as $30 million in tax revenue from sports betting in 2019, not to mention all the private sector benefits New Jersey has enjoyed. New York’s legal sports betting market could easily double that. Cuomo should also pay attention to what mobile sports betting has done for the New Jersey casino industry as a whole – gaming revenues were up about $200 million in 2018, in no small part due to mobile sports betting.

Governor Cuomo’s comments make it clear that he is largely missing the point. Mobile sports betting legalization is also about curbing a billion-dollar illegal sports betting market that boasts millions of New Yorkers as customers. These offshore websites and local bookies pay zero taxes, provide no assistance for problem gaming issues, and undermine companies that are committed to doing things lawfully and responsibly. Limiting sports betting to upstate casinos neither helps these casinos directly, nor captures an appreciable portion of the billions of NY customers’ dollars flowing through illegal gambling outlets.

The Governor should also be concerned about protecting the integrity of the world’s most popular and valuable professional sports leagues, all of which call New York home. Match fixing and corruption happen in the shadowy corners of the offshore betting market, not regulated environments. To fail to take this into account as a valid reason to authorize mobile sports betting is a slap in the face to those sports leagues.

The Governor’s negativity on mobile sports betting notwithstanding, influential sports betting supporters in both the Assembly and Senate remain undeterred. Now that sports betting policy is not part of the budget, legislators are going to have the more difficult task of passing mobile sports betting as a standalone bill, which means this policy will have to pass on its merits. Fortunately, the facts support mobile sports betting, and passionate supporters will continue to fight to keep this issue at the forefront. New York sports fans will have do more than just hope that their elected officials will do the smart and responsible thing in 2019 - they should write their representatives and make their voices heard to ensure this issue gets the support it needs to beat the odds.

But New Yorkers may also want to have a backup plan just in case things go wrong. For many, that backup plan will include driving across the George Washington bridge.

Charles Gillespie
Chief Executive Group