NEW YORK, NY - OCTOBER 13: An exterior view of Madison Square Garden prior to the season opening game for the New York Rangers against the New York Islanders on October 13, 2016 in New York City.
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New York State lawmakers will convene for a special session to start the constitutional amendment process for online sports betting.

Danny Small

Online sports betting in New York is still very much on the table. Rumors of a special session convening in New York took hold earlier this week. Howard Jay Klein of Seeking Alpha wrote:

“There’s widespread belief that momentum is building toward convening a special session of the New York state legislature to move as soon as possible on an expanded sports betting bill.”

These rumors are partially true, but there is a significant catch. New York State Senator Joseph Addabbo Jr. confirmed to ESNY that there is a special session convening with the hopes of starting the process for a constitutional amendment.  Unfortunately, traveling down the path of a constitutional amendment would not be the “as soon as possible” road to online sports betting in New York.

A constitutional amendment would need to pass in two consecutive sessions in New York State Congress and it would need to pass a referendum. A conservative estimate would assume New York would reach full online sports betting in 2022 through the constitutional amendment process.

In the meantime, hundreds of millions of dollars are crossing the border into New Jersey to bet. While New York debates the need for a constitutional amendment for online sports betting, New Jersey reaps all the benefits. New York is experiencing a massive loss in tax revenue due to the COVID-19 pandemic. But constitutional arguments are taking precedence over common sense.

More than $800 million went from New York to New Jersey via sports betting in 2019. That number comes via a report from Eilers & Krejcik Gaming and it showcases the massive revenue that New York is just giving away to another state.

In addition to money going into New Jersey, the state is losing untold millions to illegal markets and offshore sportsbooks. Bringing those bettors back into the fold is the safest option for all New Yorkers.

The good news is that lawmakers can walk and chew gum at the same time. According to Sen. Addabbo, starting the process for a constitutional amendment is not “waving the white flag” on passing online sports betting legislation in 2020. Sen. Addabbo’s original “Plan, Pass, and Prepare” strategy, which we’ve covered extensively here at ESNY, is still a possibility this year, but the directive coming from Governor Andrew Cuomo is that a constitutional amendment is required.

“The actual procedure that I’d like to do is do a constitutional amendment on mobile sports betting because of a requirement that says we have to do it,” Sen. Addabbo explained. “Simultaneously, this year, do the enabling legislation and you present both to the Governor.”

To break this down into simple terms: There is no need for a constitutional amendment in order for New York to pass online sports betting. In fact, sports betting is already legal in the state, but it’s confined to four retail casinos in upstate New York. Physically putting online sports betting servers on the land of licensed casinos would satisfy New York State’s constitution.

While Gov. Cuomo plays legislative chess with online sports betting in New York, he is missing out on massive opportunities. Let’s just say the constitutional amendment process plays out and New York passes mobile sports betting in 2022. That’s leaving revenue from 2021 and likely much of 2022 on the table. There is no magic switch that flicks and turns on online sports betting. Setting it up properly takes some time.

New York could potentially miss out on the revenue from two Super Bowls, two years of March Madness, among many other major events. It just doesn’t make sense.

When push comes to shove, New York is going to need the tax revenue online sports betting can provide. There’s no way for the state to cut its way out of 2020 and the economic impact of COVID-19. The boost in revenue that would come from the legalization of mobile sports betting is something that could be hard for Gov. Cuomo to pass up.

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