Betting on New York
Terry H. Schwadron
Jan. 27, 2022
Even in its first two weeks, New York State’s bet on gambling is already turning heads.
Mobile sportsbooks already are churning through bets on a pace even exceeding the rosiest estimates of backers, clocking $603 million in bets in the first nine days and hearing $50 million in revenue.
In the first weekend for legal sportsbook alone, New York gambling outdistanced that in New Jersey and Pennsylvania combined, seen as aggressive gambling markets.
As a result of the state’s 51% tax rate on gambling, that already is translating to $24.6 million in taxes. Under state law, about 80% of that revenue is flagged for two purposes: elementary and secondary education and property tax relief.
New York’s television channels are littered with gaudy promotions on the excitement, ease and lure of easy winnings, complete with first-bet discounts and would-be guarantees. On TV, athletes talk openly about betting despite the longtime taint against doing so, and news outlets publish betting odds and how-to’s.
At the same time, gambling addiction services are already gearing up. The state already has published a website and telephone helpline for those recognizing gambling problems at nyproblemgamblinghelp.org and the HOPE line at 877–846–7369.
Among the companies, Caesars Sportsbook is leading the pack, with well over 40% of the business, followed by FanDuel and Draft Kings, according to those who track the business.
New York is anticipating tax revenue to grow from $375 million in coming fiscal year to $518 million by 2027, reports Politico.com. That’s not huge for a state with a $216 billion annual budget, but it is a sizeable start.
The surrounding states say they are well positioned to stay competitive with New York because they tax gambling far less. New Jersey assess sportsbooks at 14.25 percent of the take as compared with New York’s 51%.
Always Ready to Bet
The noteworthy thing here, which actually is so ordinary that it seems to be taken for granted, is that people willing to complain bitterly about higher prices for food, gas and tolls seem to have ample discretionary electronic cash on hand to drop on the outcome of a football game.
Some people gamble for money, others toward enjoyment, excitement and socialization, says Psychology Today. None of that apparently is offset by frustrations over inflation, Covid, international tensions or political divides. Research shows the progression to problem gambling is almost always accompanied by an increased preoccupation with winning money and chasing losses.
Across the country, it’s taken about four years for sports betting to go from a dark market vice, relegated for most Americans to bookmakers and risky offshore gaming sites, to an accepted pastime across the country, Politico notes.
From a time when religious or moral conservatives would advise gambling temperance, we moved towards state lotteries and then to legalizing casinos in selected states. The incredibly profitable experiences of gambling sites on Native American lands beyond the reach of U.S. law showed the way.
In 2018, the U.S. Supreme Court cleared the way for states to legalize sports betting by striking down a 1992 federal law that limited such gambling to Las Vegas. The justices ruled in favor of New Jersey, which had long argued that the federal law unconstitutionally intruded on state affairs, telling state legislators what they can and — more importantly — can’t do with their time.
For a variety of political reasons, gaining support in the New York State legislature for gambling took a couple of years of active lobbying.
New York legalized four upstate casinos have offered in-person betting since 2019, but the revenue is dwarfed by these first weeks of online betting. New York’s state constitution has a gambling ban, but the ban has a few major exemptions — for the state lottery, for horse racing and for up to seven private casinos across the state. As the Gothamist tells it, former Gov. Andrew Cuomo insisted that the computer servers for the various mobile betting platforms will be placed at a state private casino, and he made then the case that mobile betting is allowed under the constitution.
Betting on Expansion
Sports betting is now legal in 30 states, with 18 having some form of online wagering and finding themselves in a nationwide battle for dominance in a multibillion-dollar industry.
In New Jersey, bets hit $1.3 billion last October alone, and all but $100 million of it came from online wagering, even with the state’s nine casinos in Atlantic City and three racetracks offering in-person betting.
In the last couple of years, news outlets have followed New Yorkers driving across the Hudson to the Meadowlands Racetrack sportsbook or just to park in New Jersey where they could bet legally. Still, GeoComply, which tracks betting by location, found that just 9 percent of New York players had placed bets previously in New Jersey and that nearly 88 percent of New York customers were brand new to the sites.
California is considering a referendum in November to approve sports betting. Ohio has plans to move towards legalization in 2023. A federal court in Florida halted a plan for a deal between the state and the Seminole Tribe to run sports betting, and Texas legislators are reported to be interested as well.
Goldman Sachs last March estimated that online sports betting and internet gambling revenues in the U.S. may grow from $900 million a year to $39 billion by 2033.
Though I personally have no qualms about betting, I am surprised at the acceptance and state promotion of legal gambling. For all the current-day, divisive talk about the need to preserve strict moral traditions against creeping liberalization of sexual and gender identity, about upholding religion and prayer in schools and playing fields, somehow the freedom to bet is held as separate and apart from other moral behavioral codes. Somehow, you’d think the moral-based conservative voices that support banning and burning books would be speaking up about gambling as an issue beyond individual entertainment choice.
So much for consistency. But then there is money to be made here.
You can bet on it.
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