New York Won’t Win Until It Goes Mobile, Downstate
New Yorkers bet an estimated $837 million in New Jersey last year because New York City lacks retail casino sportsbooks and mobile betting options. Good for New Jersey. Not so good for New York. But a new study says it’s a matter of when, not if, New York lawmakers rectify the situation. State Senator Joseph Addabbo (l.) says he’s fielding many complaints.
A double whammy awaits New Jersey from across the Hudson River: mobile sports betting and downstate New York casinos.
Until both happen, the lack of mobile sportsbooks and retail books in New York City is driving bettors to the Jersey side, where they can place bets at on-site sportsbooks or by phone.
“I’m getting the complaints,” state Senator Joseph Addabbo recently told CBS2’s Marcia Kramer. “I go to the coffee shop and hear it from my people. They don’t want to go to Jersey. They don’t want to get in their car, or jump on the train and go to Jersey. They want to stay here.”
New Yorkers bet an estimated $837 million in New Jersey on sports events last year, according to Chris Grove, a partner at Eilers & Krejcik Gaming and managing director of the ﬁrm’s Sports & Emerging Verticals Practice. Grove co-authored a study on New York’s dilemma when it comes to New Jersey.
The $837 million represents almost 18.3 percent of the $4.6 billion that was bet in the state in 2019. That handle translated to $57 million in revenue, meaning New York lost about $6 million in tax revenue. New Jersey is off to a good start this year, with $540 million in January handle, up 40 percent from last year.
Without mobile and retail options in New York City, New Yorkers could bet $1.56 billion in New Jersey by 2022. That would equate to $105 million in sports betting revenue and $11 million in tax revenue, the study found.
“If New York authorizes downstate casinos and online sports betting, we expect that most of the demand currently flowing to New Jersey will shift back,” Grove said.
But downstate casino authorization is a matter of when, not if, he added. “Pressure appears to be building for lawmakers to move at an accelerated pace, but handicapping the situation is difficult due to the sheer number of moving parts.”
Addabbo has introduced a new bill that he said would reap millions for New York, which is facing a $6 billion budget gap. With online taxed at 12 percent and retail at 8 percent, tax revenue from sports betting would hit $166 million. The state would also get an additional $36 million in license fees should the state charge $12 million per license.
Not all of that projected revenue will come from in-state bettors. Eilers & Krejcik estimates anywhere from $51.7 million to $66.9 million could be attributed to tourists and commuters.
Addabbo said he’d like to get the bill passed by the April 1 budget deadline. The Senate is on board, but the Assembly is not. Complicating matters is continued opposition from New York Governor Andrew Cuomo.
Cuomo’s office did not respond for comment, but in a USA Today article, the governor urged caution as gaming companies seek expansion of the Empire City Casino in Yonkers and Resorts World New York City in Queens, and also stump for another casino in New York City.
MGM-owned Empire City and Genting’s Resorts World have video-lottery terminals and electronic table games owned by the state. They want to be able to add slot machines, live table games and sports betting, and are eager to get state approval for two of three remaining casino licenses in New York, while the Las Vegas Sands Corp. is lobbying to open a casino in New York City.
New York has a ban on new casino licenses until 2023 to allow the four upstate ones to develop their businesses. But gaming giants are hoping to pressure lawmakers and Cuomo to lift the ban sooner, hoping to entice the state with additional revenue.
Cuomo didn’t include any casino expansions in his budget plan for the fiscal year that starts April 1. “These are complicated issues, and I am skeptical about quick, knee-jerk reactions to doing something like that, especially if it’s conditioned on money,” he said.
Should New York get its wish list, what does it mean for New Jersey?
“While this is a significant share of the market, it is not the whole market, especially as sports betting is still showing a high degree of growth,” said Rummy Pandit, executive director of the Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism at Stockton University. “That New Yorkers will no longer need to cross state boundaries to place a mobile sports bet will have an impact on New Jersey’s sports betting handle from non-residents, but is unlikely to have much impact on wagers placed by residents.”
The smaller share of sports betting handle, generated by retail sportsbooks, may see a greater impact from the introduction of full-fledged casinos in New York City and Yonkers. The Meadowlands, which captured $149.9 million of New Jersey’s $299.4 million in sports wagering revenue last year, has benefited from being a short distance from the New York border and would likely be hardest hit.
“Still, given its proximity to MetLife Stadium and Meadowlands Racetrack, the Meadowlands sportsbook has access to amenities that other facilities could find difficult to replicate,” Pandit said.
And New Jersey’s early adoption of mobile sports betting has given the state an edge in capturing customers. If the mobile product is essentially the same on either side of the border, it’ll come down to the amenities and rewards offered by the individual sportsbooks to influence consumer choice, Pandit said.
“New Jersey’s sportsbooks have invested in their retail books to provide a quality customer experience,” he said, “and they have all the amenities of Atlantic City to offer as a way of differentiating their service from the competition.”