Euphoria, then dismay welcome Andrew Cuomo's embrace of sports betting. By David McKee

There's nothing like a financial dose of Covid-19 for some politicians to have a come-to-Jesus moment about gambling. In the case of New york city State Gov. Andrew Cuomo, there has been a remarkable volte-face on the issue of online sports wagering. While sports wagering exists in New york city, it is just on a small, in-person basis. Cuomo has long opposed mobile wagering on the grounds that it would need a constitutional change. No longer. Now Cuomo says it only takes the Legislature's say-so, as he tries to find ways to gaps in the Empire State budget. (Cuomo's even drifted the legalization of cannabis.)

In a declaration revealing his change of heart, Cuomo composed, "At a time when New york city faces a historical deficit spending due to the ... pandemic, the present online sports betting structure incentivizes a big segment of New york city residents to travel out of state to make online sports wagers or continue to purchase from black markets ... New york city has the possible to be the biggest sports wagering market in the United States, and by legislating online sports wagering we aim to keep millions of dollars in tax revenue here in your home, which will only strengthen our ability to rebuild from the COVID-19 crisis." The number of millions? $72 million by a conservative estimate.

New york city could also claw back the 20 percent of New Jersey's sports-betting service that comes through the Holland Tunnel. That's $837 million in manage right there, in what might be a multi-billion-dollar market. JP Morgan analyst Daniel Politzer visualizes online sports betting concerning market in 2023 and New york city gathering $1.25 billion in profits (not handle) within two years. (This presumes favorable tax rates and policies, hardly an offered.)

Cuomo would pair OSB suppliers to existing casinos. FanDuel, DraftKings, FoxBet, bet365 and Bet Rivers currently have boots on the ground. BetMGM and Twin Spires might get into the act if Cuomo's meaning of casinos is broadened to consist of racinos. Caesars Entertainment may likewise get involved, as it is believed to have an arrangement with the Seneca Nation's Turning Stone casino. DraftKings, meanwhile, can utilize its relationships with the New york city Giants (football), New York Rangers (hockey), New York Knicks (basketball) and Madison Square Garden to construct market share.

Getting Cuomo's wish passed in Albany is not a slam-dunk. The Legislature has been recalcitrant towards gaming expansion in current sessions, in part due to the failure of upstate casinos to satisfy their earnings projections. Whether Native American people have exclusivity will almost certainly be litigated. However, making a convert of Cuomo prevails over the difficulty that has actually stymied mobile sports betting in the past. Still, sports betting stocks sold down on the news, primarily because Cuomo desires the state lottery game to administer OSB.

"I'm not here to make casinos a great deal of cash. I'm here to raise funds for the state. So we have a various design," the guv groused. "The ramification existing would be a high tax rate, and that the conventional B2C operators possibly would not be able to get in the market," wrote Credit Suisse expert Ben Chaiken.

Also, Cuomo's main ask for proposals would only use to four commercial casinos, putting the 3 tribal ones on the outside looking in. "We translate this as there being a single operator dealing with the state (most likely at an elevated tax rate), as we have seen with [DraftKings] in New Hampshire (50% tax)," Chaiken explained. If so, that would leave DraftKings, FanDuel, bet365 and Bet Rivers competing for one, all-inclusive license. Another major player that could try to elbow its way in is Penn National Gaming's Barstool Sports, which might discover either the Oneida or St. Regis Mohawk tribes receptive.

All of this leaves Cuomo in the catbird seat. As major OSB operators play musical chairs, knowing that only one will be seated when the music stops, the sky's the limit on what they will have to be prepared to offer.

* Originally written February 2021 *

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