Cuomo Backing Sports Betting Has A ‘Back To The Future’ Feel

A New York State Governor Cuomo supporting having the lottery manage legal, regulated sports betting is nothing new.

Not only did Andrew do that on Wednesday, but his father Mario did that as well — back in 1984.

But in vaguely Shakespearean (Freudian?) style, the son’s ambition is more aggressive than his father’s.

That is, Mario only backed parlay sports betting, with each wager requiring the selection of at least four NFL teams (with baseball and basketball possibly to come later). It would have been available where lottery products are sold.

On Wednesday, meanwhile, Andrew pitched the idea that state lottery officials should run a massive mobile sports betting operation.

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Both proposals ran into almost immediate problems.

Lottery oversight a bad bet?

In 1984, the state Attorney General’s office declared within a day or two of Cuomo’s announcement that the plan “probably” would require a constitutional amendment.

That same office later made it, well, “official” with a formal opinion to that effect:

“We find that the case law of New York permits no other interpretation than that lotteries are forms of gambling essentially based upon random chance, and that New York jurisprudence has never deemed betting on the outcome of sporting events to be a lottery.
Certainly, one may not, in the teeth of canons of construction, expand the scope of the state lottery exception so as to legalize every illegal gambling scheme involving consideration, some element of chance, and a prize.
“If the state government is to be authorized to run a program in which it accepts wagers on the outcome of professional athletic contests, either single contests or multi-contest parlays, such authorization can only be acquired through an amendment to the Constitution.”

Notice the last paragraph, where it states “either single contests or multi-contest parlays” can become legal only via a state constitutional amendment.

Deja Vu All Over Again?

So what was “Cuomo The Younger” thinking, one wonders, when he said at a press conference Wednesday afternoon, “We want to do sports betting the way that the state runs the lottery and the state gets the revenues.

“Many states have done sports betting, but they basically allow casinos to run their own gambling operations. That makes a lot of money for casinos, but minimal money for the state. And I’m not here to make casinos a lot of money — I’m here to raise funds for the state.”

Gaming law attorney Daniel Wallach, who has closely followed the ever-expanding U.S. legal gambling industry for almost a decade, told that his only explanation for what looks like a blunder would be that someone in Cuomo’s office was unaware of that previous legal opinion (although it was non-binding).

That might explain why within another hour or so, Cuomo’s office put out a statement: “The New York State Gaming Commission will issue a request for proposals to select and license a sports operator or platform to offer mobile sports wagering in New York. This operator or platform must have a partnership with one of the existing licensed commercial casinos.”

But note that in the 1984 AG’s opinion, if “the state government is to be authorized to run a program” involving sports betting, that is said to require statewide voter approval first — and Cuomo wants to start raking in what an aide estimated at $500 million annually in taxes from sports betting as soon as possible.

Wallach said while moving the lottery out of the picture avoids a more direct broadside against the prior opinion, the potential for lawsuits is considerable on several fronts should Gov. Cuomo continue this push as expected.

Who’s not mentioned in Cuomo’s sports betting proposal

The New York horse racing industry and the state’s tribal casinos — both backed by powerful lobbyists — got seats at the table in previously proposed sports betting legislation in Albany, Wallach noted.

But that RFP notice suggests that only a single operator would run all of New York State’s mobile sports betting — “a real head scratcher,” Wallach said. He conceded that a bidding war to lock up a chunk of revenues from the largest state that offers sports betting would produce an unparalleled bidding war.

Under Cuomo’s preliminary concept, it would seem to leave out of the equation the racinos at Yonkers Raceway, which is the home turf of Assemblyman Gary Pretlow, and Aqueduct, the backyard of state Sen. Joseph Addabbo Jr.

Pretlow and Addabbo happen to be the two leading lawmakers in Albany who have been backing sports betting expansion bills for more than two years.

Tribal casinos have a right to offer the same sort of gambling that the state’s four upstate commercial casinos do — and that includes sports betting on-site at all of those facilities.

But what happens if a commercial entity like DraftKings, FanDuel, Bet365, or Rush Street Gaming — the companies that run sports betting for the commercial casinos — winds up with a state-sponsored monopoly? Even if the tribes each sign their own private agreements with other operators, is that a fair deal for them?

And what about major U.S. sports betting players such as Penn National and Caesars/William Hill? Does it make sense to prevent them from bidding if the state’s casino operators aren’t getting their usual cut anyway?

Cuomo is scheduled to deliver his “State of the State” speech on Monday morning, and a state Gaming Commision spokesman told that the state’s budget proposal would have “full details” about mobile sports betting by Jan. 19.

It’s probably safe to say that in regards to Cuomo’s plan, intense lobbying efforts are well underway by just about everybody who’s anybody in the U.S. sports betting industry.

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