There is no doubt: sports betting is taking over the US. Look no further than the Super Bowl. It is estimated that last Sunday, nearly 31.4 million Americans wagered about $7.61 billion on this year’s final game of the NFL season, a 78% increase from last year.
And if there’s a state that best embodies the sports betting craze, that would be New York. Upon launch on January 8, the Empire State has broken record after record, posting nearly $2 billion in its first 30 days of legalized mobile gaming. It’s a figure most states would reach in months of betting, if they ever do.
“We are extremely pleased with how it’s going,” New York State Senator Joseph Addabbo tells Yogonet in an exclusive video interview conducted last Friday, ahead of Super Bowl. “We’re not even operating at our full potential but we’re breaking records.”
In conversation with Yogonet, Sen. Addabbo, Chairman of Committee on Racing, Gaming and Wagering, reflects on the success of mobile sports betting in the Empire State and what to expect of the market going forward. Moreover, the lawmaker discusses the possibility of introducing new forms of gambling, including iGaming, and offers his take on three proposed new casino licenses for downstate this year.
Sports betting in New York was anticipated to be a success upon lunch, but perhaps not to this extent: the state broke the national record for handle in just one month. Did you expect this to happen?
We were all hoping it would be big. We have a great fan base who are very interested in their sports. Many perceive New York as the sports capital of the world, and many leagues have their headquarters here. We also have a great population and a great tourism base. We are extremely pleased with how it’s going for the very first month. And that’s only with seven operators. We’re not even operating at our full potential but we’re breaking records.
With Super Bowl figures yet to be released and March Madness coming up, what lies in store for New York and sports betting?
First things first, Super Bowl Sunday and, for the first time ever, New Yorkers will be able to safely and credibly do a mobile sports bet on one of the biggest sports days of the year. We expect to possibly break another national record, the one for more wagers in one day.
But the trick for New York is always going to have to be long-term. I expect that, after a certain period of time, the numbers will level off and maybe even decline a bit. New York will have to keep evolving in this very competitive market, but we’ve built a great foundation on which to go forward so far.
Seven operators are already live in the state with two more to come. What is your assessment of how the launching process is moving forward?
I give a lot of credit to the New York State Gaming Commission. Even with the change from one governor to another, they were on track to make sure we were up and running with mobile betting well before Super Bowl so that we could work out any technical glitches or hurdles that we had to jump over before the date. And we did: ahead of the Super Bowl, we are ready to handle that volume of bets. Right now, all sportsbooks seem to be pretty much in full operation.
While it is anticipated for the state to stabilize over time, do you expect it to remain the top market for the US and to take the top sport from New Jersey?
I do. New Yorkers are very savvy with sports betting and they were doing something else for two years before we got to launch mobile sports betting, whether to go to New Jersey, Pennsylvania or doing it illegally. Now we’ve asked them to switch what they were doing and stay with us.
So far, they’ve shown they switch because we got about roughly a million new accounts. Now we want them to stay, and the only way is to offer initiatives and incentives for that to happen. I think we will: they will stay with us because we’ll have that premier top-shelf product.
New York lawmakers set the tax rate at 51%, a record-high for the country. Many believed this would present a problem for operators seeking to make a profit. Would you say that this tax rate has paid out so far?
We were very upfront that the state was looking for 51%. It may not have been the initial vision of the legislature. It is what the previous governor wanted: to make the most money for New York rightfully. Everyone who negotiated with the state signed up to it knowing it’s 51%.
Now the volume that we have seen so far in our first month – nobody’s really complaining. There will be changes along the way, and we have to adapt to make sure that we are ready as a legislature, working with governor Hochul’s office on the best product possible. We’ll be fine going forward.
There is currently an active bill in committee, introduced by assemblyman Pretlow, which seeks to prohibit operators from asking for a change on this 51% tax rate. Do you think that they could ask for a change going forward?
We will always have to evaluate how we’re doing in mobile betting: every aspect of it, including the tax rate. I know of this bill. It also says that we can look at a reduction in the tax rate if we increase the number of operators’ skins.
Pretlow and I always agreed that we should have more skins, so if we do, maybe we can talk about a lower tax rate. Right now, we are on the right course, so we’ll keep it where it is at this point. But we may have to evaluate it six or eight months from now. I think it’s too early to determine how New York is doing with the 51%.
Is it too early as well to discuss new operators entering the state?
You always have discussions on what the mechanism would be to incorporate these new operators, what the market would look like, how it would impact current operations… It’s a discussion you can have, but as far as active legislation, it’s a little premature.
Where do you see New York mobile sports betting once the market matures?
We will continue to figure out what needs to be improved. Like horse racing: right now, a New Yorker can bet on any major sport, but they have to go on another app to do a horse racing bet. We want to marry the two and make it easier, so we’re going to talk about how to incorporate horse racing into mobile sports betting.
But we can look at other sports like NASCAR too, for example, to figure out how to make this product better. Maybe look at kiosks in stadiums and arenas, or on racetracks, where somebody can go to that venue and have a better experience by going to a kiosk and placing a bet.
It’s a business like any other; it evolves. Some of the incentives will start to be eliminated and the newness of mobile sports betting will be over, but it’s only going to be replaced by something else to entice people to partake. And that’s what we’ll have to see.
How would you say efforts to include fixed-odds horse wagering are moving so far?
This week I have a committee meeting with the Racing, Gaming and Wagering Committee and we will pass that bill out of committee (Ed.: The meeting occurred before the time of publishing, with the bill, which also allows betting at kiosks in stadiums and arenas, passing 7-0), which does fixed-odds and incorporates horse racing into the mobile sports betting mechanism. It will become part of the budget discussions because it does have a revenue factor for the state.
I hope over the next six weeks, leading up to the April 1st New York State Budget, that we will have this foundation on how to incorporate horse racing and fixed-odds into mobile sports betting. There will be more details to it and the discussion will intensify over the next weeks.
You have also supported the legalization of online casino gaming. Could you tell us if there are meaningful discussions being held in this regard?
Other states have done it very well. At the height of the pandemic, New Jersey’s iGaming numbers went right to the roof. With today’s technology, we can put caps on accounts and on credit cards as we do with mobile sports betting to make sure somebody isn’t going into the area of problematic gambling and addiction. If we do it methodically, we can safeguard people from doing it illegally or going to another state.
We can regulate here in New York, as we did with mobile sports, and witness a large amount of revenue for educational funds, and even more jobs, but always keeping an eye on the addiction issue. I’m hopeful, again, over the next six weeks with the budget negotiations, that we can talk about iGaming as well.
In terms of land-based gaming, you have shown support for Gov. Hochul’s proposal for three new casino licenses in New York City. What’s your assessment of this plan?
The executive budget basically made us quicken the pace for the activation of these three licenses downstate. That meant a lot, not only to the gaming industry that looks to do business in New York, but for educational funds and the creation of jobs. If we do nothing, it will happen anyway next year: 2023 is when these licenses become active, but we are getting to do it now.
We will realize minimally $1.5 billion upfront revenue because these three licenses could go for $500 million and up each, which will go for services that our people deserve. This is the way to go, and it’s a great conversation to have over the next six weeks with the budget.
These licenses are seen as an opportunity for existing facilities in both Queens and Yonkers to become full-scale casinos, and you have shown support for that to happen. What makes them suitable candidates?
Both Resorts NYC in Queens and MGM Empire in Yonkers have proven themselves to be very successful gaming sites, even without being full casinos. They’ve acclimated themselves very well and been great community partners, hiring a lot of local residents. To have them get a license would mean more jobs and additional money for our local municipalities and non-profits.
We can’t just give the license to them: there has to be an open process, fair and transparent. One factor we will look at is already existing credible, successful entities. And in terms of speed to market, in a month’s time, both of them could be up and running, also a major factor to look at. So again, I like MGM and I like Resorts a lot, but there has to be a process, and that’s what we’re going to work out with the local administration.
