New York's Legislature is Missing the Sports Betting Boat
September 20, 2019
There's an old adage: "you can lead a horse to water, but you can't make it drink." Around the middle of last year, Aside from Nevada, New Jersey distinguished itself as the first state to legalize sports betting for its residents. It was also the first state besides Nevada to start actually accepting bets on sports.
All of this has led to an amazing chronology of sports betting revenues over the last year or so. None of this should be lost on legislators sitting in nearby New York, yet the state seems to be having trouble coming to grips with the idea there's massive tax revenues out there for the taking, all for the benefit of New York's tax coffers.
It's worth noting that New Jersey has successfully taken over as the highest producing sports betting market in the US. That's correct. The state is currently taking in more in sports betting revenues than the well-established Nevada market that has had a 50 year head start, plus currently serves as home to dozens of sports books located in the most popular casino resorts in the world. It's also worth noting that the FanDuel sports book at the Meadowlands Race Track is now the single highest grossing sports book in the country.
There's two things that are driving these numbers. First, New Jersey was the first to legalize online and mobile sports betting, which has given the New Jersey sports betting industry a tremendous boost. Second, a lot of the revenues are being generated by a large group of downstate New York sports bettors who are flocking across the Hudson River to bet with New Jersey sports books.
New York has legalized sports betting for its residents with four upstate casinos already taking wagers. What missing is the New York legislature is reluctant to allow online sports betting, which gives the downstate New Yorkers little choice but to travel a shorter distance to New Jersey sports books.
The loss of potential tax revenues is quite clear to New York residents who are getting frustrated with the state legislature. The state legislature is in a quandary because the opening up of online sports gambling for residents throughout the state will infringe on the legislature's relationship with Tribal gambling concerns.
For now, New Jersey is happy to benefit from New York's inability to grasp reality. This is likely to be a familiar scenario among other neighboring states that will eventually have to consider testing established alliances for the opportunity to capture a tremendous sports betting tax revenue base.