New York State Budget – Bump in the Road for On-line Wagering

For years, New York has been able to move forward with its budgets on time.  This year is different as the budget deadline of April 1st has passed.  Members or the legislature and the Governor are trying to resolve some significant outstanding issues. One of the issues is on-line gaming.

This issue is very fluid and changing by the hour.  The Governor currently insists that NY State select the on-line services i.e., “skins” that can operate in New York.  Under this plan, the NY Gaming Commission would select the on-line vendors.  NY State would obtain a large amount of the on-line revenue (perhaps as much as 50%). The Governor appears to have moved away from his “single provider” model and realizes that there will be multiple on-line vendors.  The key point is he wants NY State to control the number of “skins” and select who gets them – not the casinos.

Under the Legislature’s plan, the casinos would select and partner with the on-line sports vendors.  NY State would not select which on-line gaming services operate in New York. The state would merely tax these services.

The Native American Casinos have now entered the debate to make sure there is language in the legislation requiring NY State to help change federal law.  Absent these changes, consumers in a number of up state counties may not be eligible to access on-line gaming services.

We want to promote competition.  While it is difficult to speculate, the Governor’s approach could lead to perhaps three for four competitive on-line services in New York.  There could be more.  If the casinos are allowed to partner with multiple on-line services, we could see a dozen or more on-line gambling services in New York.

The Governor and Legislature are still negotiating.  Some in the legislature are asking to have the on-line gaming provisions taken out of the budget negotiations.  If the issue is taken out of the budget, it is unlikely that on-line gaming will be available in New York for the fall football season.  In fact, it could be more than a year before we see on-line gaming in New York.

We want this issue resolved as part of the budget negotiations.  Regardless of whether the Governor’s or the Legislature’s plans are adopted, there will be multiple on-line gaming services in New York.  The only question will be how many.  Obviously we prefer the Legislature’s approach.

Again, this issue is very fluid.  Hopefully an agreement can be reached as part of the budget process sometime this week.

 

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