Why is NY online sports betting following the Rhode Island model?

NY Gov. Andrew Cuomo’s plan for online sports betting seems to mirror the current lottery-run systems in New Hampshire or Rhode Island. Why?

Excelsior. The New York State motto means ever upward. The Empire State is supposed to be a leader that forges new paths for others to follow, but when it comes to online sports betting, New York is taking a different approach.

Governor Andrew Cuomo has hinted at a plan that would mirror Rhode Island’s and New Hampshire’s current systems for online sports betting. It’s head-scratching, to say the least.

Albany Law School recently hosted a panel of speakers to discuss the future of mobile sports betting in New York. Bennett Liebman, a legal expert and one of the architects behind the 2013 bill that legalized sports betting in casinos in New York, broke down three different models for how states run mobile sports betting:

• Low taxes, low entry fees, many skins
  • New Jersey, Michigan
• Higher taxes with several skins available
  • Pennsylvania
• Lottery monopoly with high taxes
  • Rhode Island, New Hampshire

“It’s intentionally sketchy,” Leibman explained of Gov. Cuomo’s plan for online sports betting in New York. “But mobile betting is going to go to one or more casino approved skins, after a competitive bidding process. It’s modeled like New Hampshire — high tax monopoly, or oligopoly. No added retail shops or betting in sports venues.”

This begs the question: Why is New York following a plan that two small states use? The sheer difference in size between the states means that what works in New Hampshire and Rhode Island might not necessarily work in New York. Furthermore, the notion that online sports betting is reaching its full potential in either state is debatable, at best.

The monopoly with high taxes means that players won’t have the option to choose the best sportsbook for their needs and the sportsbooks themselves won’t feel inclined to offer bonuses or promos to the player base. Online sports betting in New York would become a reality in the lottery-run system, but it would be a far cry from robust, player-friendly markets in states like New Jersey, Pennsylvania, and Michigan.

Daniel Wallach of Wallach Legal LLC, a firm that focuses on sports betting and gaming law, discussed the stakeholder issue with New York following the likes of Rhode Island and New Hampshire. He references the current legislation introduced by NYS Senator Joseph Addabbo Jr. and Assemblyman J. Gary Pretlow.

“To look at New Hampshire as a model for New York just doesn’t make sense given the landmass and population size and New York’s mix of gaming stakeholders — racetracks, casinos, video lottery terminal operators, OTBs that now could get to participate in Senator Addabbo’s and Assemblyman Pretlow’s plan that New York’s complicated gaming landscape requires an inclusive solution rather than exclusivity.”

Leaving stakeholders out of the planning process is a major issue with Gov. Cuomo’s plan. Bid protesting and legal challenges are inevitable which would gum up the works for a mobile launch. The longer the state waits to push forward with online sports betting, the longer neighboring states like New Jersey and Pennsylvania will be able to siphon off tax revenue from New York.

It’s quite clear that online sports betting has a future in the Empire State, but will it look like a cheap imitation of Rhode Island’s current system or a forward-thinking plan that addresses the unique circumstances of New York?