Monday, July 15, 2024

Bad luck, New York puts it all on vice

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New York Governor Andrew Cuomo is expected to give details on Monday of his plans to legalize mobile sports betting in the state, creating the largest sports betting market in the United States.

The move is part of a plan to collect $ 800 million a year in taxes on mobile sports betting and the proposed legalization of marijuana in New York City, which is struggling with a project $ 14.9 billion shortfall this year because of the pandemic.

Mr Cuomo said on Wednesday he wanted a public administration of mobile gaming, similar to New York’s lottery system, as a means of further controlling tax revenues. He is expected to give more details in his annual State of the State address on Monday.

“A lot of states have done sports betting, but they basically allow casinos to run their own gambling operations,” he said. “It’s a lot of money for the casinos, but it’s a little money for the state. I’m not here to make a lot of money in casinos, I’m here to raise money for the state.

Yet betting platforms and industry advocates are skeptical of Mr. Cuomo’s plan. Dustin Gouker, analyst for the gambling trade research site PlayNY, said the industry is awaiting the full New York state budget proposal, which is expected to be completed this spring.

“The devil is always in the details, but opening up a market that could be worth over $ 20 billion a year in betting could be a watershed moment for the entire industry,” Gouker said. . “On the other hand, a state monopoly, like the one proposed by Gov Cuomo, would be a mistake that could limit New York’s cap forever.”

Mr Gouker’s estimate that New York could bring in $ 20 billion in betting would put the state first among those who have legal sports betting. From the Supreme Court beaten down a federal ban on the practice in 2018, Nevada and New Jersey topped the rankings for legal sports gambling, registering bets of $ 12 billion and $ 10.9 billion, respectively, so far, according to Legal Sports Report.

This Supreme Court decision has leads to consolidation among casino and gambling companies, as outfits drive out part of the growing US market. In the first nine months of 2020, gross sportsbook gaming revenue in the United States increased 27% to $ 677.8 million, according to the American Gaming Association.

In spring 2020, a daily fantasy sports app became the DraftKings online bookmaker became public through a complex reverse merger, now considered one of the most successful Special Purpose Acquisition Company, or Spac, of the year.

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Griffin Finan, vice president of government affairs at DraftKings, said the company’s customers are eager to bet on mobile in New York City, but recognize that “important legislative and regulatory steps remain.”

In-person sports betting is currently legal in New York at 11 casinos and designated operators, according to the AGM, all located in the upstate region, north of New York.

Downstate executives are hopeful that Mr Cuomo’s support for mobile sports betting will lead to the approval of New York City casinos, adding jobs in a hospitality industry ‘devastated by the pandemic’.

“Properly regulated, sports betting is a suitable source of income and entertainment, and there is no reason New Yorkers should not enjoy these benefits as much as other states which have subsequently legalized the practice. “said Kathryn Wylde, president of the Partnership for New York City, a group of businesses and employers, welcomes the move.

In 2005, the Partnership released a study estimating that legalized sports betting could bring New York State between $ 290 billion and $ 1.9 billion a year in tax revenues while undermining organized crime.

Meanwhile, 15 U.S. states have passed laws to legalize and regulate the use of recreational marijuana since 2012, generating $ 6.6 billion in tax revenue through November 2020, according to the advocacy group of the Marijuana Policy Project.

New York’s first legislative efforts to legalize the two vices were anticipated by the onset of the pandemic last spring, which interrupted the state session that typically ends in March.

Additional reporting by Joshua Chaffin


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