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Future of Sports Wagering in New York–Betting on the Odds

Gaming Alert
June 25, 2018

Despite five states (so far) leading the charge to starting sports wagering in their jurisdiction – Mississippi, New Jersey, Pennsylvania, Rhode Island and West Virginia – the NY legislature left Albany early on June 21, 2018 without passing its two-house sports betting bill.  The Assembly majority believed that there were too many issues to resolve which required weeks and months, not the days and hours left on the 2018 legislative calendar.  Among these questions were the tax rate, whether an integrity (or royalty) fee for the leagues would be collected, how many operators of the book would be permitted, how would mobile and internet play be addressed, whether video lottery facilities would be able to run their own sports book or pool, how would the OTB’s participate and would the now closed NYC OTB be re-authorized.  It would seem that the Legislature will conduct listening events and re-launch the effort with the new Legislature in January 2019.

But with the NFL and NCAA football seasons set to launch in 8 weeks, and the MLB post-season arriving a month after that, does last week’s non-action in NY prevent the Empire State from reaching the goal line?  Will NY lose potential profits with the failure of the legislature to act?  Will New Yorkers need to travel to casinos and racetracks in New Jersey and Pennsylvania, and potentially Massachusetts, to legal place sports wagers?  Perhaps.  But perhaps not.    

In 2013, as part of the act which authorized up to seven commercial casinos, the Legislature included a sports wagering bill that was mostly ignored at the time.  That Section became partially effective on January 1, 2014 but also needed some action on the part of Congress or a court of competent jurisdiction to change federal law.  With the Supreme Court’s decision in Murphy v. NCAA, the 1992 Professional and Amateur Sports Protection Act (PASPA) was declared unconstitutional, thus  triggering the second requirement under the NY statute. 

The NY Sports Wagering Act is located at Section 1367 of the Racing & Wagering Law.  Summarized, the Section provides:

  • Sports wagering may be conducted upon a ruling that such activity is lawful
  • A licensed casino under the Act may operate a sports book upon approval of the Gaming Commission
  • A sports pool is to be operated at a sports wagering lounge located at a casino
  • Only players age 21 and over who are physically present in the sports lounge may place a sports wager
  • The holder of a sports pool license may contract with an vendor to conduct the operation in accordance with the regulations of the Gaming Commission
  • No sports pool can be operated until the provisions of the regulations developed by the Gaming Commission have been satisfied

Admittedly, NY’s Sports Wagering Act (“SWA”) is more of a roadmap of the potential method to operate a sports pool, especially compared to the 2018 legislative initiatives which failed to pass.  Compared to that proposed legislation, the SWA is disappointingly limiting - only pools conducted within sports lounges within casinos are permitted – and only persons present at the lounge can place a wager.  This means that unless the Gaming Commission issues broadly written regulations, the 10 million residents south of the Mario Cuomo Bridge must travel to Resorts World to place a legal sports wager in NY.  Upstate residents will be able to choose between the casinos located in Tioga, Schenectady and Waterloo. 

The current statutory scheme awaits Gaming Commission action on issuing regulations before a license to operate a sports pool can be issued.  Although the timing of those regulations may allow New Yorkers to participate in the 2018 NFL regular and MLB post-seasons, the limiting nature of the SWA should compel the Legislature to act, and act quickly either in a special session this year or in the first quarter of 2019 when a new Legislature is set to assume control.  New York residents will need to voice their preference – continue with daily fantasy sports and illegal sports betting or bring sports wagering to light in NY for the first time.