Despite New York State Governor Andrew Cuomo’s attention not being obviously be turned elsewhere other than the ongoing global pandemic and the health crisis, it seems the topic of the legalization of online sports betting has found its way back into the focus of New York’s State Legislature.
The pandemic has hit the economies of many states hard, and New York is no exception to that golden rule. The State Division of the Budget of New York is projecting a state revenue drop of close to $13 billion due to the ongoing health crisis.
In that economic landscape, the concept of legalizing online sports betting has become a hot topic of debate in New York recently. Municipal bond manager, Jim Colby is now leading a charge to have online sports betting legalized to repair the budget crisis that is taking over the Empire State. He has even gone as far as urging other states around the nation to embrace online sports betting, but despite the rush for many states to get onboard with legal online sports betting to combat the pandemic related economic crisis, many have been slow to make the required budget repair changes, including New York.
Sports betting is legal throughout New York State; however, the sports wagering action is limited to land-based sports wagering at the bricks-and-mortar upstate casinos. New York City is more than three hours drive away from any of these bricks-and-mortar sports betting locations, and the state is losing out on millions of dollars of potential state revenue by not allowing mobile sports betting.
Many New Yorkers currently simply catch the subway or walk across the George Washington Bridge behind neighboring New Jersey’s geo-protected state lines, place their legal online sports wagers and come back to New York State. However, the revenue their wagers generate does not return to New York State with them.
NJ benefits from New York’s inaction on sports betting legalization
Fair enough to say it’s not exactly possible to calculate the precise number of online wagers that are placed by residents of New York in the Garden State, however, it is clear to even a layman let alone an industry expert, that New Jersey is shoplifting some of New York State’s betting revenue. New Jersey is much smaller in terms of area and population than New York, yet the Garden State sports betting industry dominates the tri-state area.
For context, sports bettors in the State of New Jersey wagered $4.5 billion on sports in the 2019 calendar, with 84% (or $3.78 billion) of that being wagered via mobile devices including phones and tablets. In terms of revenue raised, it’s clear the difference that legal mobile sports betting is making. New York generated $9.7 million in revenue via sports betting from July 2019 thru January 2020, compared to $243.3 million for New Jersey, according to official figures. It’s a point not lost on Jim Colby.
Colby believes that any additional tax revenue sources at all should be urgently considered to help solve the ongoing budget crisis, and clearly, online sports betting is one of the fastest-growing economic sectors in the country. If the State of New York were to legalize online sports betting, it may not solve all the Empire State’s economic woes, however, it would certainly go a long way towards kick starting some form of economic repair.
Clearly, Colby has a point and it’s not lost on gaming industry experts either. Sports bettors are doing it anyway, and many believe that New York state should be making some money off the industry rather than lose out to New Jersey.