A Supreme Court ruling in 2018 overturned the Federal law that had previously restricted sports betting to the state of Nevada. Since then, several states have launched sports betting, and many more have legislation lined up to capitalize on the expansive market, including New York. With so much focus on sports betting, efforts to legalize online poker have been sidelined, much to the dismay of the poker community.
Focus Shifts to Sports Betting
A hearing took place on Wednesday, May 8 in Albany to discuss the future of sports betting in New York, especially with regards to the authorization of online and mobile sports betting. Senator Joseph Addabbo, Jr. has led the legislative efforts and has been at the center of much of the discussions.
The bill in question is Senate Bill 17 (S. 17), which allows tribal and commercial casinos to offer sports betting statewide. Conditions included in the proposal are a $12 million licensing fee paid by the operators, a 15 percent tax and further “integrity fees,” each of which would contribute to generating revenue for the state.
Voters approved commercial casinos in 2013, and the resulting laws authorized sports betting in New York once the federal ban came to an end. Regulators now seek to finalize the rules, but the first legitimate bookmakers could appear in the state by fall.
The debate heats up around the topic of online and mobile sports betting. Just like the online poker world, it seems that governors are wary of introducing online elements despite the obvious economic benefits.
As written, Bill S. 17 makes no provision for online and mobile betting, though the sponsors, as well as local lawmakers, believe that the online marketplace would be a constitutional advancement of the bill if sports betting were legal.
The bill has now advanced through the committee by unanimous vote, and it’s now on to the Senate Committee on Finance for approval. The main opposition for the passage of the bill will likely come from the Assembly and will also require the signature of Governor Andrew Cuomo.
New York Sports Betting Market
When considering why the focus has shifted so dramatically from poker to sports betting, one need only consider the size of the markets. While online poker represents a significant opportunity and would generate revenues of several million a month in New York, the sports betting market dwarfs this by around 20 times the value.
GamblingCompliance estimates that the U.S. sports betting market will grow to $5.7 billion in annual revenue by 2024, coming from 34 states. Such a leap in value comes from recent changes to federal policy, allowing more states to pass legislation quickly. Theoretically, U.S.-wide sports betting market of 50 states would reach over $10 billion annually.
Leading analyst Chris Grove spoke at the recent sports betting meetings where he projected the sports betting market in New York will fully realize $1 billion in total. Such would have to include the online and mobile markets, without which his projections drop to $48.5 million.
New York expects to become one of the largest sports betting markets. New Jersey currently generates nearly $300 million in monthly online betting revenue and a further $74 million in retail betting revenue, with less than half of the population of New York.
Many New Yorkers also cross the border to bet in nearby New Jersey. CEO of Betfair U.S. and TVG Kip Levin spoke at the conference about how 25 percent of his company’s online sports betting revenue comes from people visiting from the Big Apple. New Jersey is currently the second-largest marketplace for betting, but the revenue collected there will reportedly drop once New York introduces its own legislation, keeping player’s money in the state.
It’s the same with online poker. Some online poker sites such as partypoker and 888poker in New Jersey while players in New York have to border hop. Still, it seems that poker isn’t even getting a look.
Diversion from Online Poker
Money talks when it comes to legislation, whether it be the potential legalization of the cannabis industry generating $1.7 billion in annual sales in New York, or the huge sports betting market, reportedly worth an estimated $1 billion in revenue.
Meanwhile, the online poker community is disgruntled that the SB18 Senate Bill 18 (SB18) and accompanying New York State Assembly Bill 4924 (A4924) seem to have swept under the rug. The bills have slight differences, but both outline the legalization of poker as a game of skill, with the application of licensing fees, taxations and policies.
The poker bill historically finds support to pass the Senate but fails to pass the Assembly. The recent reinterpretation of the Wire Act is the biggest hurdle, putting online gaming and interstate poker, the basis for a strong industry in the U.S., at risk.
The poker industry would be worth an estimated few million dollars a month in revenue, but it is sports betting that would generate the most revenue for the state, and without the Wire Act to contend with, the bill seems to meet less resistance.
Sports betting looks to become legal in New York while the debate continues as to whether online and mobile sports betting will become fully regulated and legitimized or whether new laws and ballots are necessary to make it possible. Despite this, sports betting has moved quickly where attempts to revitalize online poker have fallen short.
The committee will be in session until late June, giving them six weeks to complete the details of the bill before it can pass to the Senate and Assembly.