New York State Gaming Commission Delays Completion Date for Gaming Industry Analysis Report
New York's gaming landscape took a massive hit due to the COVID-19 pandemic, leading the State Gaming Commission to extend the deadline for a crucial gaming market study. Spectrum Gaming Group, the company tasked with the study, was slated to submit its report on Monday, but the deadline was extended due to the pandemic's impact on the gaming industry and future development.
For months, the industry has been buzzing about the final report, as it could help shape the future of mobile sports betting in the Empire State. Spectrum Gaming, a leading consulting group in gambling economics, policy, and regulation, won the bid to conduct the study back in November 2019. The commission had dedicated a small section of a 157-page Request For Proposals (RFP) to mobile sports betting just two months prior.
In an email to Sports Handle, spokesman Brad Maione stated, "The potential impacts of this pandemic on the future of existing gaming and its implications on future development need to be fully considered." No new deadline has been set.
Gambling industry critics slam New York
Given the size of the potential market, New York's inability to reach a consensus on mobile sports betting has faced widespread criticism from gambling advocates. Since the repeal of PASPA two years ago, neighboring New Jersey has become a powerhouse in the mobile betting market. Last year, New Jersey's handle surpassed $4.5 billion, generating almost $300 million in revenue. The windfall translated to roughly $36 million in tax revenue for the state.
Matt King, CEO of FanDuel, tweeted, "It strikes me as absurd that New York state is forcing our New York customers to travel out of state to engage in [legal sports betting] - and losing tens of millions in tax revenue at the same time."
Prior to the coronavirus outbreak, New Jersey reported a handle of $494.8 million with approximately 88% of wagers placed online. It marked the sixth consecutive month that the handle in the Garden State exceeded $400 million. While New Jersey has become the standard for a thriving online marketplace, New York Sen. Joseph Addabbo Jr. hasn't minced words when criticizing the governor's office for its perceived antipathy toward mobile sports betting.
Addabbo initially estimated that mobile sports wagering could bring the state $60 million in licensing fees, along with an additional $30 million in annual tax revenue. At a gambling conference in November 2019, Addabbo asserted that mobile sports betting could bring New York $100 million in revenue in the first year of online sports gaming.
By presenting a mature market in New York, Chris Grove, partner at Eilers & Krejcik Gaming, an independent research firm based in Irvine, Calif., hinted that the market could generate more than $1 billion in revenue annually. Grove estimated that the market would reach full maturity in three-six years, with 95% of revenue stemming from mobile platforms[1].
In February 2020, prior to the pandemic outbreak, Addabbo called his state a vehicle stalled on the side of the road while his competitors zoomed by in the fast lane[2]. To deal with the budget shortfalls caused by the pandemic, Addabbo argues that legalizing mobile sports betting could provide a significant revenue source.
In April 2020, New York's COVID-19 Economic Analysis revealed that the state would fall approximately $13.3 billion short in projected tax revenues for the current fiscal year. The shortfall could swell to approximately $61 billion by fiscal year 2023-24, Governor Andrew Cuomo said[3]. Sen. Addabbo believes that legalizing mobile sports betting could help alleviate this financial strain[1][2][3].
When asked whether the harsh economic conditions could prompt the governor to reconsider his position on mobile sports betting, Cuomo's spokesperson did not respond[1]. In contrast, similar discussions around a Massachusetts sports betting amendment have emerged as lawmakers consider the future of mobile wagering in the state[3].
[1] Clark, Marcus (2021). New York could be a massive online gambling market, but the road’s been rocky. CNBC.[2] McGinty, Amanda (2020). New York May Lose More Than $1 Billion in Legal Sports Betting Revenue by Time It Launches, Analyst Says. Sports Handle.[3] Amato, Jano (2020). New York's sports betting ban could cost the state hundreds of millions in revenue. Sports Handle.
- The broad implications of the pandemic on the future of sports-betting, particularly mobile sports betting, necessitated the extension of the deadline for Spectrum Gaming Group's report, which could shape the market in New York.
- In the light of New Jersey's thriving mobile sports-betting market, generating nearly $300 million in revenue last year, critics have slammed New York for its delay in reaching a consensus on mobile sports betting.
- Chris Grove, partner at Eilers & Krejcik Gaming, estimates that New York's maturing mobile sports-betting market could generate over $1 billion in revenue annually, with 95% stemming from mobile platforms.
