Tioga Downs Owner Goes Off On Cuomo, New York Online Sports Betting Model

In 2013, Gov. Andrew Cuomo championed bringing commercial casinos to the Empire State to boost local economies in upstate New York.

In fact, it was considered a big political victory when voters approved Cuomo’s vision.

Yet, when authorizing online sports betting in the state budget this week, Cuomo called the casinos he brought to New York “unnecessary middlemen.”

playin-ny asked one casino owner, Jeff Gural from Tioga Downs, why he thinks Cuomo turned on the casinos that he fathered. He didn’t mince words.

“Because he’s a prick, it’s as simple as that.”

Online sports betting doesn’t go as planned for NY casinos

When Gural opened the casino at Tioga Downs in 2016, he never could have imagined that the state would cut him out from the most profitable means of sports betting.

After all, the 2013 law pushed for and signed by Cuomo legalized sports betting only at casinos, if a change in federal law allowed.

Given that New York only approved for sports wagers to be taken at casinos, the online sports betting plan includes them in a roundabout way. Casinos will be paid $5 million annually if they host servers for a sports betting licensee.

If that was an ask from casinos in the state, Gural isn’t aware of it. And the pittance doesn’t appease him.

“I didn’t ask for that. I have no idea where it came from. My guess is it was a concession because they felt how much could they really screw us. They thought the four of us might gang up and say none of us are going to host the servers and then there’d be a lawsuit. Maybe it’s in there so that if we sued them, they could make the argument that we’re paying them. That’s probably why they did it.”

However, with the addition of the casino fee for hosting servers, Gural doesn’t think commercial casinos will file a lawsuit to try to stop online sports betting. He said that he could see Native American tribes file a suit, or a constitutionality challenge, but not commercial casinos.

All that planning goes out the window

New York casinos have spent the past couple of years preparing for mobile sports betting. There was no doubt that online was the future of wagering, making up more than 80% of bets in other states where legal.

With the law only permitted sports wagering at casinos, legislation introduced in the Senate and Assembly pushed a casino-led model. And since it was a proven model across many states, including neighboring New Jersey, New York casinos were getting ready.

That included making market access deals with the top sports betting operators in the business. Those partnerships included:

• Tioga Downs with FanDuel
• del Lago Resort with DraftKings
• Resorts World Catskills with Bet365
• Rivers Casino with BetRivers
• Oneida Indian Nation with Caesars/William Hill
• Saint Regis Mohawk Tribe with FOX Bet

The legislative proposal included two skins per casino. Rivers Casino had a second-skin partnership with Penn National/Barstool, and Tioga Downs with PointsBet.

Under the state-run model, all those deals are for naught.

“All the market access deals are shot,” Gural said. “Hopefully FanDuel will be involved because they’re No. 1 in the country. Then hopefully they’ll do the right thing and keep me involved, but it’s certainly not something I’m anticipating.”

Should lawmakers have waited for better option?

Here’s how the New York budget process works. The governor and his staff come up with an executive budget proposal in January. That’s the basis from which negotiations occur.

While the Senate and Assembly come up with their own one-house proposals, budget language is drawn up by the governor. The Senate and Assembly can remove a piece from budget bills altogether, but they cannot alter the language.

Cuomo introduced his state-run model for online sports betting in the executive budget. But, given the other challenges he’s faced since then, people didn’t expect he would take a stand in this area. Assemblyman Gary Pretlow thought Cuomo would simply accept substituting the legislative plan.

“You would have thought this would be easy, but for some reason, he dug his heels in,” Gural said. “Nobody knows why.”

Once Cuomo stuck to his state-run model, lawmakers had a choice. They could remove online sports betting from the budget bill and continue pushing for their model as a standalone bill or accept his plan and see how it goes. They fought to get a minimum of four mobile apps added to his plan and took it.

“I wish they had waited,” Gural said. “I don’t know how much longer he’s going to be governor.”