New York Budget Talks Headed for Overtime, Will Sports Betting Derail Casino Push?

Posted on: March 31, 2021, 11:59h. 

Last updated on: July 5, 2021, 08:34h.

As the clock struck midnight on the East Coast, it became April 1 in New York. That’s the day, per the state’s constitution, that lawmakers are supposed to have a budget in place. However, all signs indicate a protracted negotiation continuing in New York, and gaming issues appear to be part of the reason.

New York sports betting budget
New York Gov. Andrew Cuomo speaks in the Assembly Chamber at the state Capitol during the 2020 Electoral College vote. Cuomo and lawmakers now are in talks to settle the state’s budget, and those talks include sports betting and other gaming issues. (Image: Mike Groll/Office of Governor Andrew M. Cuomo)

Morgan McKay from Spectrum News reported late Wednesday that a spending plan for the fiscal year, which starts on Thursday, may not happen until Saturday at the earliest.

We have quite a few budget bills remaining to get done. We don’t have them,” Senate Finance Committee Chairwoman Liz Krueger, D-Manhattan, told McKay.

One of the issues that appears to be drawing out the matter is sports betting. Both Gov. Andrew Cuomo (D) and the New York state legislature inserted mobile sports betting into the spending plans. But those plans were not even close to being in alignment.

Earlier in the day, state Sen. Joseph Addabbo, the Queens Democrat who chairs the Senate Committee on Racing, Gaming, and Wagering, said he put prospects for sports betting happening in the budget at 50/50.

Cuomo Getting His Way on Sports Betting?

While lawmakers have proposed a multiple-skin system tied to casinos, similar to the setup in most states, Cuomo wants a state-run system similar in fashion to how the state operates the lottery. And while the embattled governor might be at his weakest politically in his three terms in office because of mounting scandals and even a possible impeachment, Cuomo has not backed down on that stance.

Cuomo wants to put to create a competitive bidding process for one or more licenses, with a stipulation that the operator or platform has a partnership with one of the four commercially licensed casino resorts in upstate New York. Each one of those already has a retail sportsbook and operator.

The governor believes that approach can net the state more than $500 million in revenue. Gaming analysts haven’t researched that proposal. However, a report by Spectrum Gaming Group (NOTE: not affiliated with Spectrum News) estimated that statewide sports betting, both mobile and retail, could generate gross revenues of about $1 billion.

The one state that has handled sports betting in the closest fashion to what Cuomo proposes for New York is New Hampshire. In late 2019, the New Hampshire Lottery issued a solicitation that drew 13 responses. From there, officials picked DraftKings, BetMGM, and Kambi as mobile finalists. DraftKings won both retail and mobile contracts after it agreed to split revenues with the state.

BetMGM offered 20 percent to serve as the exclusive mobile provider.

Sports Betting Talks Hindering NYC Casino Discussions?

Sports betting isn’t the only gaming issue in the New York budget. There’s also the issue of downstate casino licenses. That issue, for now, is even murkier, because the state Senate, state Assembly, and Cuomo each have different positions on the issue.

The Senate’s proposal calls for issuing up to three licenses in or around New York City. It also would give two existing racinos – MGM Resorts’ Empire City Casino and Resorts World New York City at Aqueduct – a slight preference for licenses, because they could be operational much quicker than an entity needing to build from the ground up.

Sources close to the situation told Wednesday there’s concern that the protracted sports betting talks may not leave much, if any, time to reach consensus on the casinos.

The downstate casino initiative has several supporters. They see the issuance of three casino licenses as not only a revenue generator for the state – the licenses would command hundreds of millions of dollars each – but also creates thousands of jobs for a region that has been reeling for a year because of the COVID-19 pandemic.

Statistics from the New York state Department of Labor show there were roughly 3.5 million jobs in NYC in February. That’s a decline of 626,800 from a year before. And 237,500  of those – or 37.9 percent – were lost in the leisure and hospitality sector.

What’s troubling for some is that the sports betting discussion that’s taking place now could happen later in the legislative session. It’s not ideal, sources said, but there’s time. However, the casino license issue needs to happen in the budget, they said. The same applies to possible tax breaks that could protect jobs at the four upstate resorts.

Otherwise, casinos must wait until next year, when a new budget takes shape.