Sports Betting From Your Phone Coming to the Empire State?
Some big news in the world of sports gambling with New York Governor Andrew Cuomo saying he wants to legalize mobile sports gambling in the Empire State. When the rumor was first reported, DraftKings stock (DKNG) shot up nearly 5% pre-market and finished the day up 2.9%.
But Jim Cramer and Bill Enright say there's a problem with Cuomo's plan to allow New Yorkers to bet on sports from their phones or online. Under Cuomo's proposal, the New York Lottery and Gaming Commission would be the sole operators of the sportsbook marketplace. That will cause a few issues for gamblers.
For starters, it would take about 18 months for the Lottery Commission to build the sportsbook and mobile technology, instead of just opening the door for existing platforms to operate. Then of course there’s the fact of what essentially amounts to a monopoly by the Lotto Commission. Gamblers wouldn’t have the opportunity to shop around for better prices or odds if there was only one legal operator. Essentially the NY Lotto would have the power to offer odds that most gamblers would deem unfavorable.
Illinois empowered their Lottery Commission when first legalizing mobile wagering and quickly gave up after they conceded starting a sportsbook from scratch proved to be too overwhelming. Right now, Washington D.C. has its lottery organization run its sportsbook, and people in D.C. still go to other states to get better odds.
New York is facing a massive budget deficit and Cuomo sees the legalization of mobile sports wagering as a way to earn extra revenue for the state. He's not wrong. Just look at the $65-$75 million New Jersey is expected to make in taxes from sports gambling in 2020. In fact, nearly 20% of all bets placed in New Jersey are from people who travel across state lines from New York according to Legal Sports Report.
But if Cuomo and the New York legislators wanted to make tax revenue and keep gamblers happy and stop them from crossing over into New Jersey, they would find a way to allow established companies to operate and tax their revenue.
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