What’s Going on With New York Sports Betting?

January 31st, 2019

What’s Going on With New York Sports Betting?

Of the two dozen or more states to consider legalized sports betting since the Supreme Court struck down the federal ban last year, few have taken a more circuitous route than New York. Though legal sports betting was, in some capacity, technically legalized as early as 2013, the Empire State has still not yet taken a legal sports bet.

After years of legal and legislative back-and-forth disputes over eligibility, access and a host of other issues, New York’s gaming commission took a major step toward this week that (finally) puts the state on a path toward its inaugural wager. There is now even a tentative timeline for when some New York gaming facilities will be able to take a bet.

But the battle over sports betting is far from over. Only upstate New York casinos will be eligible to take bets in a best-case scenario under the current agreements. A more robust market, with online offerings or options outside casinos, may take two years or more to commence (if it’s even to commence at all).

This is all while neighboring New Jersey has taken more than $1.2 billion in legal sports bets. Meanwhile Pennsylvania is also taking in-person bets, and is set to launch its online sports betting market in the coming months. Several New England states are taking steps do the same.

So why has it taken so long for New York to catch up? And, more importantly, when will New Yorkers finally be able to place a bet?

Not surprisingly to anyone following New York sports betting, those answers are seldom straightforward. Here’s a breakdown to try to best explain some of the most frequently asked questions about something that even those monitoring the situation on a daily basis have often times struggled to understand.

What’s the Background on New York Sports Betting?

In part as a way to spark state gaming revenues, and the New York economy overall, Gov. Andrew Cuomo championed a constitutional amendment to allow commercial casinos in the northern part of the state. Voters approved the amendment in 2013, and four commercial casinos opened upstate in the following years.

As a way to further bolster their revenue potential, the amendment also allowed the new casinos to take sports bets if the preemptive federal-level sports wagering ban, called the Professional and Amateur Sports Protection Act (PASPA), was ever eliminated.

After years of legal challenges led by New Jersey, the Supreme Court in May 2018 announced it had struck down PASPA for violating the 10th amendment. That meant, in theory, New York casinos could take a bet that very day.

Eight months later that still hasn’t happened.

Why Didn’t New York Take a Bet Right After the PASPA Repeal?

The legal reason was because there were no regulations to achieve legal betting. All states with legal sports betting, or those that wish to have it, have to set forth their own regulatory procedures. New Jersey and Delaware finalize their regulations within a few weeks, and most other states have done so with a few months.

Conversely, New York didn’t make any substantial progress until this month. After months without any action, on Jan. 28 the New York State Gaming Commission ratified regulations for the upstate casinos to take sports bets.

Why Did the New York Gaming Commission Make these Moves Now?

Though few would say so publicly, sources close to the situation pinpoint the delay on a conflict that began back in 2013 when voters approved the new commercial casinos.

Before it opened its first-ever commercial casino properties, New York housed a group of Native American casinos run by tribes on federally recognized, autonomous land. Not surprisingly, the tribes were not thrilled about the new competing commercial casinos that could jeopardize their own revenue potentials.

That included the Seneca Nation of New York, operators of multiple upstate gaming facilities. The Seneca’s and the state government had previously agreed to a compact that gave the tribe the exclusive ability to offer casino gaming over a large stretch of upstate New York in exchange for 25 percent of slot machine revenues that were given to the state.

But In 2017, the Senecas argued a clause in the compact didn’t actually specify that the tribe give a portion of its slot revenues, so the tribe stopped paying the state.

Though the halt in payment was argued publicly as an issue within the compact’s language, those following the situation said privately it was a retaliation for the opening of the commercial casinos. The timing of the Seneca’s move to stop paying slot revenues, near the same time as a new commercial casino in upstate New York began taking bets, was not a coincidence, sources said.

That led to a more than a year of legal battles that wasn’t settled until earlier this month. An arbitration panel ruled in favor of the state and ordered the tribe to repay the slot revenue.

Insiders say the move by the gaming commission after the settlement was reached is also not a coincidence.

With a longstanding legal (and financial) battle resolved, the state government, as well as both commercial and Native American casino owners, are now preparing to move forward with sports betting. Because of state law, the tribal casinos will be able to offer sports betting as they are allowed to provide any gaming option that the commercial facilities offer.

When Can I Bet on Sports in New York?

That, sadly, is also not an easy answer. But there is a light at the end of the tunnel.

With approval from the gaming commission, the regulations now go to a legally-mandated 60-day public comment process, where residents or stakeholders can weigh in on the proposals and potentially petition for changes. If there are any changes, it goes through another review process and public comment period before it can be approved.

Its impossible to predict if the commission will change its rules, but if it doesn’t, state casinos could apply to take sports bets as soon as April.

That doesn’t mean casinos are assured to legally take wagers for the NCAA Men’s Basketball Final Four in early April.

After regulations are finalized, casinos would still need to fulfill application requirements (as well as the parameters set form in the regulations), and pass all mandated state regulatory test. It remains to be seen if the casinos will be allowed to begin that review process immediately, even technically before the regulations are finalized, which could help expedite the process.

In that best-case scenario, it will still likely take a month or more for a casino applicant to fulfil every requirement from the state, then finalize internal staffing and training to operate a sportsbooks, prepare a physical area to take a wager and so on.

Still, the gaming commission’s regulatory approval, the most important hurdle to legal sports betting, has been cleared. To take a best guess upstate New York casinos will be taking sports bet sometime before Cooperstown hosts the 2019 MLB Hall of Fame induction ceremony in July.

When Can I Bet Online?

It will take significantly longer to take a legal bet with your smartphone.

Though Both of New York’s southern neighbors take mobile bets or are set to do so, there’s still no immediate path for the Empire State to do the same.

The original 2013 amendment included no provisions for online betting and lawmakers and legal analysts agree it will take new legislation in order to do so.

But that leads to further questions. Lawyers and elected officials can’t agree on what it would take to amend the law.

The Cuomo administration argues it will take a constitutional amendment, similar to the one passed in 2013. Other officials believe a law could pass during the state’s current legislative session and wouldn’t need to go to voters for final approval.

Even if New York could reach an agreement about the required steps to pass a law, it’s still not certain lawmakers will agree about what a mobile sports betting bill would look like. Would the state’s horse tracks be able to take bets? Would mobile-only providers, like DraftKings and FanDuel, be able to enter the market without any casino affiliation (as is the requirement in New Jersey)?

Then there’s a host of other issues include age restrictions, bet limits and even if bettors could gamble on in-state teams. And though Democrats hold both houses of the legislature as well as the governor’s mansion, there’s still no consensus among lawmakers in Albany about mobile betting in the first place.

There is no short answer to when New York could have mobile betting. Some industry stakeholders argue an all-encompassing amendment before voters, one that covers many of the questions above, would be the best possible scenario.

But even then it may not be until 2020 or even 2021 when that amendment could arrive before New York voters. And even though they approved a gambling expansion measure in 2013, but there’s no guarantee they’ll do the same years later.

What’s certain is New York will remain a focal point of the nascent sports betting market.

New York is the nation’s fourth-most populated state and the largest to show any proclivity whatsoever toward sports betting. It’s also home of much of the nation’s largest media outlets and most prominent cultural institutions, meaning any move toward sports betting here would have an outsized impact on other states considering a similar move.

The previous roundabout legalization process only draws more attention to one of the most interesting, and important, states for legal sports betting.