New York recently announced the approval of nine online sports betting licenses to operate in the state: FanDuel, DraftKings, Bally Bet, BetMGM, Caesars, WynnBET, Empire Resorts, PointsBet and BetRivers. Fanatics and bet365 were not approved, and BetMGM announced a deal with Madison Square Garden. However, there’s still a wait until it can go into practice.
So what’s the hold up on New York’s online sports betting? Well, for the longest time, sports betting was limited by a federal prohibition. That rule was repealed by the Supreme Court in 2018. We saw many states put forth measures to legalize sports betting immediately, while the events of 2020 made it clear just how important an online component is. Online poker and horse race wagers went in place fast, but sports betting is its own kind of gambling. One that requires multiple parties to reach an agreement.
First the measures needed to pass local state government bodies. In New York, the Gaming Commission approved this in 2019. There was some opposition that led to this yearlong debate, as several New York lawmakers didn’t want to approve measures that included mobile casino games except for poker. Former Governor Cuomo eventually managed to get the lawmakers to agree to include mobile sports betting in the state’s budget for 2022. Now, New York must select two online sports betting platforms to be the first to launch, with the decision required by December 6. Then, only after January, can online sports betting start in the Empire State.
That said, sports betting is actually already legal and happening in New York. It’s only allowed in person, in upstate casinos run by New York’s Native American tribes. This brings us to another obstacle in the way of New York’s quick adoption of sports betting: the tribes need to run their business in the way that’s best for them. In other states, some tribes fought the rise of online gambling because it threatened to lessen their profits. At the casino, the tribe controls where the bets happen and gets the money directly. For online betting, they have to run an app service, which often means paying developers, designers, potential server hosts, and perhaps cutting a deal with Apple and Google. Because of this, many tribes would rather work out a deal to lessen what gambling apps can do or make it so the servers have to run on tribal lands. These negotiations can slow things down.
There seems to be a similar case in New York with the slowdown of online gambling adoption. The tribes still control most of the gambling at the moment, since casinos are the only legal place to wager on sports until that February 2022 action goes into place. This does have the side effect of hurting New York’s potential revenue. As most of the casinos are far upstate, they’re not easily reachable by residents of New York City. By essentially cutting off one of the biggest cities in the world, New York is losing out on the sports betting money from millions of people. Once online sports betting goes into place, all of these NYC sports fans will be able to place bets conveniently from their phone. If all goes according to plan, the state of New York is about to have a very profitable Super Bowl Sunday.
New York took its time to get sports betting fully legalized. There was opposition among lawmakers, deals to make with tribes, and licenses to approve. But in 2022, New Yorkers will finally be able to bet big on the Giants.
