What Will Mobile Sports Betting Look Like in New York?
April 20, 2021
After the New York legislature and Governor Andrew Cuomo reached an agreement last week on legalizing online and mobile sports betting for New York residents, the clock started ticking in earnest. The only thing remaining for the powers to decide is the who and when questions.
As legislators were looking for solutions to put in a bill the Governor would sign, they were leaning against the traditional bookmaker model. That would involve bookmakers aligning themselves with New York casinos and then bidding for the proper licensing. Gov. Cuomo was never keen on that option. In fact, he wasn't all that keen on the passing of an online/mobile sports betting bill in the first place.
However, he had a sudden change of heart as budget pressures mounted in New York, and the state legislature was being forced to watch huge amounts of tax revenue dollars flooding into other states like New Jersey, Pennsylvania, and New Hampshire in the future. Finally, the Governor had enough and relented.
However, he envisions an online sports betting model where top online bookmakers bid for the exclusive rights to provide New Yorkers with mobile sports betting access as a stand-alone operator. The thought is that a stand-alone operator would be willing to give a larger piece of the pie to the state, as much as 50% of sports wagering revenue a year. With an estimated $10 to $12 billion a year in online sports betting handle and a hold rate of about 10%, Cuomo is looking for $500 million to go into New York's coffers.
While the model Cuomo is looking to put in place has been successful in other states, none of those states can produce the numbers that online/mobile sports betting will bring in New York. It's a bit of an experiment but the only option that the Governor put on the table to get a deal done.
Unless something changes in the next month or two, that is the model New Yorkers can expect to see when the first online bets are accepted. The one thing that is clear to all interested parties is all the top U.S. online bookmakers will be lining up for this opportunity. That will certainly include the likes of DraftKings, FanDuel, Penn National, and William Hill.
Right now, everything associated with online/mobile sports betting in New York is a mess. However, it is something that could get cleaned up in a hurry, and the bet is that is exactly what is going to happen.
Clearly, sports bettors and the state legislature would like to see online bookmaking operations going live as soon as possible. However, the actual target is very clear. All of the powers to be are looking for everything to be in place by the start of the NFL regular season in September of 2021. After seeing that New Jersey brought in close to $800 million in online sports betting handle in March, the motivation is there to get things done fast.