Will Cuomo's Online Sports Betting Proposal Maximize New York's Potential?
Published February 9, 2021 by Elana K
Cuomo has proposed an online sports betting model that puts the state lottery in charge and allows the state’s four commercial casino operators to bid for licenses. A monopoly, essentially.
A recent study from Spectrum Gaming has assessed that New York’s 7 casinos — 4 commercial and 3 Native American — have the potential to bring in more than $1 billion in online sports bets annually, which would result in nearly $100 million in tax revenue for the state. The only way this is possible, however, is if New York does not follow the model submitted by Governor Andrew Cuomo.
Cuomo has proposed a model that puts the state lottery in charge and allows the state’s four commercial casino operators to bid for licenses. A monopoly, essentially. At the most, this would result in 4 online sports betting operators that Cuomo claims can generate about $500 million in taxes annually.
The study conducted by Spectrum Gaming based its figures on at least 7 online licenses, not 4. Judging from the experiences of other states, open marketplaces, as opposed to sports betting monopolies, are usually more successful at driving competition and increasing the overall revenue of the industry.
Additionally, the more licenses that are available, the more licensing fees the state can collect. If New York restricts its industry to 4 operators at the most, it will lose out on millions of dollars in licensing fees.
There is some logic, however, to Cuomo’s proposal. By limiting private enterprise, Cuomo is ensuring that the revenue from sports betting will go to the state, not to private companies.
"I’m with the people,” he said. I believe the people of the state should get the revenues. This is not a moneymaker for private interests to collect just more tax revenue. We want the actual revenue from the sports betting."
By Cuomo’s estimate, 20% of New Jersey’s bettors come from New York, which means that the Empire State already has a built-in market. Critics of his proposal say that a monopoly-run industry would not be able to handle the sheer volume of bettors.
