Gov. Cuomo Says New York Budget Deal In Place, So How Does Online Sports Betting Stand?

Gov. Andrew Cuomo is optimistic about the passage of a budget for the year, which may or may not include the legalization of online sports betting in New York.

On Monday, he shared that positive outlook, though with few details of the inclusion of a provision to authorize mobile wagering in the state’s budget.

It looks like Cuomo could mostly get his wishes on the format if the framework resembles his remarks. Right now, he is the highest-ranking state official speaking on the issue, in few details. Other interested parties, though, aren’t as enthusiastic.

What Cuomo said about online sports betting

In a press conference Monday, Cuomo said there’s a “conceptual agreement on all things” in the budget legislation. Cuomo inserted revenue from legal online sports betting in his budget proposal earlier this year.

Cuomo has been very specific about how he wants that to happen. Essentially, Cuomo wants the New York Lottery to be the regulatory body, not the New York State Gaming Commission. He explained why again Monday.

“There are two ways to do it,” Cuomo said. “You can give casinos the right to run mobile sports betting. You take the casinos in the state and you give them the license to run mobile sports betting and then they operate it and they make the profits. They would pay taxes to the state but the casinos make the profits.

“The second way to do it is the way we do the state lottery. We will contract directly with the mobile sports vendor, FanDuel, DraftKings … we’ll contract with them and we’ll make the money. We don’t need the casinos as a middleman. That’s the first point of contention: should you let the casinos make the money or should the state make the money directly? My position is the state should make the money directly and then let the state decide what to do with it.”

So far, no one from the state assembly has corroborated Cuomo’s assertion that a deal is in place. Additionally, there’s no telling whether the “conceptual agreement” that Cuomo spoke of is the agreement he prefers. Another thing to keep in mind is that Cuomo’s plan may not fly, even if legislators comply with the governor’s wishes.

Opposition from casino operators

While some New York casino operators may be waiting to see more details — and to handicap the chances of a budget proposal with such provisions — actually getting across the finish line, one entity that has a serious stake spoke up.

The Oneida Indian Nation, which operates Turning Stone properties in New York, released a response.

According to their gaming compacts, tribal casino operators in the Empire State have the right to offer all/any form of gambling their commercial counterparts can. They do not have such a provision when it comes to lottery games, however. So, running mobile betting through the lottery could leave the Oneida Nation on the outside looking in.

If what Cuomo says proves true, casino operators like the Oneida Nation in the state could challenge the law. Such a challenge could be reminiscent of the legal battle over daily fantasy sports in New York.

Storms brewing on the horizon

In 2016, the state passed a law to regulate DFS games online. Not long after, a lawsuit challenged the constitutionality of that action. Essentially, the lawsuit argued that DFS fell under the definition of gambling. Thus, the only way to expand gambling in New York was with a constitutional amendment.

Although no New York casino was part of the original group of plaintiffs in that suit, Rivers Casino in Schenectady eventually joined it. The casino’s amicus brief argued that if it had to wait for an amendment before it could start operating, so should DFS companies.

The same point could be contentious here as well. The state constitution currently says that legal sports bets must happen at a casino. That’s why previous attempts to legalize sports betting required the servers that host the online sportsbooks to be located on casinos’ premises.

The thought was that would satisfy the location requirement in the state constitution. Other states, like Rhode Island, have similar provisions and have gone that route. An amendment could change that verbiage, but it would take years.

It’s still uncertain if Cuomo and the legislature will risk facing such litigation in order to try to avoid giving casinos a cut of the action. If they go that route and casinos do challenge, that litigation could take just as long to settle as it would take to enact a new amendment.