New York Budgets Include New Sports-Betting Licenses

March 15, 2022
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Both chambers of the New York legislature have expressed support for expanding the number of mobile sports-betting operators in the state in their respective one-house budget proposals.

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Both chambers of the New York legislature have expressed support for expanding the number of mobile sports betting operators in the state in their respective one-house budget proposals.

Following the release of the governor’s executive budget in January, which was silent on the topic of mobile sports-betting expansion, both chambers released their one-house budget proposals this week.

The plans serve as a foundation for budget negotiations between the executive branch and the two chambers of the legislature as the new fiscal year is set to start April 1.

The two chambers put forward slightly different plans, with the Senate plan calling for the New York State Gaming Commission to issue between two and five new licenses to companies in a second round of bidding to be concluded by January 2023.

“This is a schematic for a discussion,” said Senator Joseph Addabbo Jr., a Democrat and chairman of the Senate Racing, Gaming and Wagering Committee.

“Would it be fiscally responsible, in terms of educational funds and revenue, to consider an increase in operators to mobile sports betting, a program that has been immensely successful since its outset?”

“That’s a discussion for our fiscal analysts and the leaders of the [legislature],” Addabbo told VIXIO GamblingCompliance. “I think it’s a great discussion to have if we can iron out whatever minor differences, but that’s what budgets are all about. I love the starting point we’re at and we’ll see where it goes.”

The Assembly plan, meanwhile, calls for the commission to issue up to 16 licenses in total, which would permit up to seven new licensees in addition to the nine operators already licensed.

Since the market's January 8 launch, the eight operators live in the state have taken more than $3.5bn in wagers and seen more than $237m in revenue.

With a 51 percent tax rate in place on gross revenues, the result has been more than $120m in taxes to the state through March 6.

The Senate plan would call for that 51 percent tax rate to remain in place for any new licensees, while the Assembly plan does not specifically address the tax rate.

Under the tax rate matrix issued by the gaming commission during the initial round of applications, a market with 16 operators would see operators pay a 35 percent tax rate.

Both plans, however, include requirements for minority participation, with the Senate plan calling for extra weighting in applications for companies with minority ownership and employees, while the House plan calls for 30 percent of the state’s licenses to be awarded to minority-owned businesses.

Elsewhere, the two chambers also differ on the acceleration of downstate casino licenses.

The process of awarding three available licenses is slated to begin in 2023, but Democratic Governor Kathy Hochul included a provision in her executive budget proposal that would accelerate the process to begin this year.

The Senate, which has included a similar provision in its one-house budget in recent years, did so again in this year's proposal, while adding a $1bn license fee for each license.

The Assembly, on the other hand, did not include the downstate casinos in its budget plan.

Addabbo again called the billion-dollar fee “a starting point” for budget negotiations, which are set to begin in earnest on Tuesday (March 15).

Addabbo said he was not concerned that the Assembly left casino expansion out, pointing out that the Assembly has typically left it out of its budget proposal in past years, and that this is the first year the plan has the support of the executive branch as well.

“I think it has great momentum, and in terms of educational funding, thousands of construction jobs, post-construction jobs, post-pandemic, that's what you’re looking for,” he said.

“I think the time has come.”

Neither budget plan includes provisions for online casino gaming, although bills have recently been filed in both chambers to legalize the activity via the state's licensed commercial and tribal casinos.

“It took my team and I two and a half years to do mobile sports betting, persistence pays off,” Addabbo said of internet gaming expansion in New York. “It’s what I intended to do, start the conversation, see where certain obstacles may occur, and then we have to obviously address those obstacles.”

“I will not stop talking about it until the end of session, and then we’ll see where we go,” he added. “I don’t foresee it at this point … but we’ll see.”

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