Mobile Sports Betting Makes Its Mark in New York
In a move that could revolutionize the way New Yorkers engage with sports, mobile sports betting has officially found its way into the Empire State. This development unfolded under the watchful eyes and strategic planning of lawmakers, culminating in a seamless integration into New York’s fiscal framework.
Mobile sports betting was legalized in New York in April 2021 through legislation included in the state budget, and the first four sportsbooks (Caesars, DraftKings, FanDuel, and BetRivers) officially launched on January 8, 2022, at 9 a.m. ET, not in spring 2021 as the article’s title suggests.
The Journey to Legalization
It was during the spring of some years ago that New York’s mobile sportsbooks transitioned from a mere possibility to an exciting reality. This shift was propelled by the approval of a new state budget, which marked a significant milestone in the state’s approach to mobile sports betting. The anticipation that had been building since the announcement of budget negotiations was met with satisfaction as the initiative received the nod from Governor Andrew Cuomo at the onset of the fiscal year.
Nine online sportsbook operators were ultimately approved by the New York State Gaming Commission in November 2021 following a bidding process, with each operator agreeing to pay 51% of their revenues to the state in taxes.
The negotiations that paved the way for this development were a testament to the strategic foresight of New York State Assemblyman and Racing and Wagering Chair, J. Gary Pretlow. He highlighted the importance of aligning the legislative and gubernatorial visions for the budget, thereby minimizing any risk of veto. This collaborative approach underscored the collective commitment to bringing mobile sports betting to the forefront of New York’s economic strategy.
From Dual Proposals to a Unified Vision
The logistical groundwork for mobile sports betting in New York was laid through the convergence of two one-year budgets from the Assembly and Senate. Both legislative bodies had recognized the potential of legalized mobile sports betting, setting the stage for a detailed deliberation on what the future of sports betting in New York would look like.
In its first 16 days of operation, New York’s online sports betting market exceeded $1 billion in handle, quickly becoming the largest legal betting market in the United States.
Assemblyman Pretlow was instrumental in advocating for a model that would grant the state the ability to license 14 mobile skins across commercial and tribal casinos. This strategy was not merely about innovation in gaming; it was a calculated move to recapture a portion of the mobile sports betting revenue that was flowing to neighboring states like New Jersey and Pennsylvania.
Contrastingly, Governor Cuomo initially proposed a single-operator model, predicting substantial annual revenue for the state. However, the dialogue evolved, leading to a broader vision that embraced multiple operators within the state’s mobile sports betting ecosystem.
The Economic Upside for New York
The fiscal implications of mobile sports betting for New York are noteworthy. Initial estimates suggested that the state could see around $200 million from this venture, with the potential for sustained annual revenue. The licensing framework, coupled with a 12-percent tax on mobile wagers, formed the backbone of this economic forecast.
By October 2024, New York had collected nearly $58 billion in total mobile sports bets since launch, with October 2024 alone generating $2.3 billion in wagers and $1.7 billion in revenue during fiscal year 2023-2024.
Despite the temptation to increase state revenue through higher taxes or licensing fees, Pretlow emphasized the balanced approach being considered. This was in light of the state’s favorable financial position, thanks in part to federal stimulus funds, which alleviated the immediate need for tax hikes. Mobile sports betting, while a lucrative venture, was positioned as a complement to New York’s robust annual budget.
The Case for a Competitive Marketplace
The decision to support a multi-operator model was driven by more than just economic calculations. Pretlow pointed out the inherent benefits of this approach, from providing consumers with choice to mitigating financial risks for the state. Moreover, this strategy promised to stimulate job creation and keep betting revenue within New York’s borders.
Operational Timeline and Expectations
The operational launch of mobile sports betting apps in New York was overseen by the New York State Gaming Commission. The timeline for this rollout was contingent on the commission’s ability to establish a bidding process and regulatory framework swiftly. Given the groundwork that had been laid in anticipation of legislative approval, the launch process was expected to be efficient and timely.
In anticipation of this development, upstate casinos had already initiated partnerships with mobile betting vendors, building on the momentum of retail sports betting that was legalized back in 2019. This proactive approach underscored the industry’s readiness to embrace mobile sports betting fully.
As mobile sports betting continues to evolve in New York, it stands as a testament to the state’s adaptive and forward-thinking approach to gaming and economic development. This transition not only reflects the changing landscape of sports betting but also highlights New York’s commitment to innovation and fiscal responsibility.