Huge Hurdle for NY Online Sports Gambling Industry

New York State has made more progress with mobile sports gambling in two months than it has in two years, but there’s a huge obstacle in the path that is slowing things down. After repeatedly (and somewhat erroneously) arguing that sports gambling expansion couldn’t take place in the state without a change to the constitution, Governor Andrew Cuomo relented earlier this year and began working on a plan with lawmakers to get a market up and running as quickly as possible. However, as was to be expected, compacts New York has with state tribes are likely to be monumental challenges that could leave millions of potential sports gamblers in certain parts of the state isolated and in the dark.

Gaming Compacts Slow Mobile Sports Gambling In NY
Last month, a new budget for New York was approved by lawmakers that included revenue from online sportsbooks. It was heralded as a victory by those who have supported sports gambling expansion in the state since the demise of PASPA in 2018, but the celebratory environment has been squelched by the realization that certain language in tribal gaming compacts could now stand in the way of widespread implementation. As lawmakers have tried to come to terms with how best to introduce a mobile sports gambling market, addressing these compacts almost seems an insurmountable task, unless some agreement can be worked out with the tribes.

As explained by Syracuse.com, the Oneida Indian Nation has a tight grip on Central New York. Since 2013, it has had autonomous control over gaming in the region through an agreement with the state that includes the operation of virtual sportsbooks. This region includes the counties of Cayuga, Chenango, Cortland, Herkimer, Lewis, Madison, Oneida, Onondaga, Oswego and Otsego. In addition, the Seneca Nation, through its separate tribal compact, could thwart state efforts to introduce non-tribal sports gambling in the counties of Cattaraugus, Erie and Niagara.

Tribes Must Be Included For Mobile Sportsbooks to Open
According to New York Senator Joseph Griffo, “Cutting out major parts of Upstate New York from participating in mobile betting is terrible public policy and would be unfair to these residents. If tribal nations are not incorporated into the state’s final bill, we would potentially be disenfranchising millions of New Yorkers from participating in mobile sports betting and from the economic benefits it generates.”

Lawmakers are still grappling with the necessary legislative language required to put mobile sportsbooks into action, so there is some leeway to work with the tribes. However, they are also having to fight resistance from Cuomo, who has his mind made up about how the market should be managed. He wants the state to control all sports gambling activity, while many lawmakers want to create an open market. Those in the latter group have suggested that the Oneida Nation, and possibly others, be allowed to install a mobile sportsbook server at a commercial casino, but Cuomo is opposed to the idea.

Still No Clear Path to Acceptance
Given Cuomo’s proven ability to stand in the way of legislative efforts that don’t represent his beliefs, there still remain a number of challenges before mobile sports gambling emerges in New York. Even if it does, unless there is some type of agreement made with the tribes, geofencing that locks out millions of state residents is a real possibility. Should that happen, the state’s sports gambling revenue, estimated to potentially be greater than that of New Jersey, would fall drastically short of expectations.

There’s still hope that resolution is found quickly and Cuomo’s support base has dwindled. However, there is no clear path toward acceptance of any mobile sports gambling measure and more work is needed. Until cooler heads prevail, New York will continue to lose out millions of dollars in potential sports gambling revenue as it looks to fill a multibillion-dollar revenue gap caused by COVID-19.

Reference: Gamblingnews.com