They don’t call New York the Big Apple because it’s a place that’s established a reputation for being among the last to get a bite out of the pie. Yet when it came to online betting sites, the state of New York was extremely slow, and in point of fact, quite resistant to getting on board this gravy train.
That fact of life appears to be about to change. All signs point to New York legalizing the technology that will bring online betting to the state. Faced with a $15 billion budgetary shortfall due to the COVID-19 pandemic, New York Governor Andrew Cuomo views online wagering as a method to garner much, if not all of that lost income back into the state’s coffers.
According to reports from the New York Daily News, Cuomo intends to make online wagering a centerpiece among his policy proposals when he makes his State of the State address later in January.
“New York has the potential to be the largest sports wagering market in the United States, and by legalizing online sports betting we aim to keep millions of dollars in tax revenue here at home, which will only strengthen our ability to rebuild from the COVID-19 crisis,” Cuomo said in a statement.
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New Jersey Raking In The Dough
While New York opted to quickly legalize retail sports betting shortly after the U.S. Supreme Court lifted the prohibition on legal sports betting outside of the state of Nevada in 2018, the Empire State was initially resistant to the idea of online betting of any kind – sports betting, casino gambling, or poker rooms.
New York legalized retail sports betting – wagers that needed to be made in person – in July of 2019. These retail sportsbooks were housed in casinos and racetracks around the state. However the vast majority of them were situated in rural areas of New York state, far away from the mass populous of New York City.
This fact of life drove New York City sports bettors to cross state lines into neighboring New Jersey in order to get in on the action. Under U.S. sports betting laws, players must be physically within the borders of a state in order to place a wager there, whether that bet be in person or online via a desktop or laptop computer or mobile device. Players must agree to have geopositioning software downloaded into their computers and mobile devices to be eligible to open an account with an online betting site.
Undaunted, New Yorkers happily signed up with the numerous online sports betting sites operating in New Jersey. There were anecdotal tales of people heading home aboard a ferry from Manhattan watching the mobile phones pop out of bettors’ pockets and into use as the boat crossed state lines into New Jersey. Estimates are that 20 percent of all of New Jersey’s online betting handle comes from New Yorkers.
This was costing the state of New York a small fortune. New Jersey set a single-month betting handle record in November, taking in $931.6 million in wagers. The state’s many betting sites took in over $4 billion in wagers during 2020. Ninety percent of that money is being wagered online.
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Getting In On The Action
As news of Cuomo’s plan to make a push for online gambling in the state spread, the state’s other big betting location, the New York Stock Exchange, also shifted into gear.
Stock prices in betting companies soared as trading opened. DraftKings stock jumped six percent, while Penn National increased 5.9 percent. Roundhill’s Sports Betting & iGaming ETF displayed an uptick of 3.3 percent.
Cuomo is reportedly leaning toward a format for New York’s online betting system that would see it run through the state lottery, as opposed to having control placed in the hands of the state’s casino operators. He believes the economics of that system would be better for the state government. Critics feel a lottery system would create less competition in the state. Some insist that such a plan is in fact against the state’s constitution and that it will never fly because of that.
Lobbyists from the online gambling industry believe that New York would be able to generate $200 million in state taxes annually from online sports betting.