New York and New Jersey are Shaping the Sports Betting Landscape

by Rick Rockwell
on June 11, 2018
14

Minute Read

The Supreme Court’s overturning of PASPA, on May 14th, created a massive opportunity for each state to usher in sports betting under their own legislation. And, it didn’t take long for states to really take advantage of this potentially lucrative venture. Everyone thought New Jersey, who led the legal fight against PASPA, would be the first state, not named Nevada, to legally allow all types of sports betting. Fortunately for those people, who thought New Jersey would be first, they’re lucky that they didn’t bet on it because Delaware actually beat New Jersey and other states to the punch as they officially started taking bets in their 3 casinos on June 5th.

Although New Jersey didn’t roll out their state approved sports betting first, they along with New York are being primed to greatly shape the landscape of legalized sports betting in this country.

Sports Betting in New Jersey

First, let’s take a moment to thank New Jersey for their lengthy legal battle against the major professional sports leagues and the government over PASPA. If it wasn’t for their fight to legalize sports betting, we wouldn’t be sitting here right now discussing this marvelous new betting era. Yes, this sports betting landscape is rather unknown at the moment, but New Jersey and New York are giving us some clues as to how all of this might turn out.

Until last month, sports betting was illegal in this country since 1993, when the Professional and Amateur Sports Protection Act (PASPA) went into effect. New Jersey actually dropped the ball at this time, as they could’ve been grandfathered in and legally allowed to take some forms of sports betting like Nevada, Delaware, Montana and Oregon. Unfortunately, they didn’t meet the deadline to apply for the grandfather clause. So, they spent the next 25 years dreading that mistake. Well, now, “the Garden State” and others can open their doors to legal sports betting and rake in the millions of dollars in betting revenue that will greatly benefit each state.

Where’s New Jersey at With Their Sports Betting Legislation?

On Thursday, June 7th, the state legislature voted to pass its finely tuned sports betting bill. And believe me, this state has been working on a framework for quite some time now. After it was passed by legislature, the bill was then sent to Governor Phil Murphy where it currently sits on his desk under “thorough review.” And with that, everyone is confused as to why Murphy didn’t already sign it as he’s been publicly vocal about legalizing sports betting in New Jersey.

In fact, many so-called pundits and members of the media believe that Murphy would’ve rubber stamped it no later than Friday, June 8th, in order to allow places like Monmouth Park to start taking bets ahead of the Belmont Stakes weekend. Unfortunately, it didn’t happen. Now, the casinos and race tracks anxiously wait for Gov. Murphy to pass the law.

One caveat that should be acknowledged is that Major League Baseball (MLB), National Basketball Association (NBA) and the Professional Golfers’ Association of America (PGA) are putting some pressure on Governor Murphy to adjust the bill to include some form of payment to each league. Of course, it’s all in the name of “integrity.”

Interesting Notes about the Bill

A quick look over Jersey’s proposed sports betting bill, and we can see a framework that’s fair to all parties involved and might just become the template for other states in the near future:

  • 5% tax rate for all casinos.
  • 25% payment to help with the efforts of restoring Atlantic City.
  • 13% tax for all internet bets.
  • 25% fee for racetracks to be split between the township and county that hosts the track.

Betfair and FanDuel Partner with Meadowlands Racetrack

On the day that Jersey’s sports betting bill moved to Governor Murphy’s desk, a major deal took place with one of the state’s top racetracks and one of sports betting’s global powerhouses. On Thursday, June 7th, New Jersey bettors didn’t get the sports betting news that they were hoping for, but they did get some major news that definitely increases the functionality and excitement of sports betting within the state.

Last week, Betfair US, the American branch of Europe’s gaming and gambling powerhouse Paddy Power Betfair, signed a deal with the Meadowlands Racetrack to bring online/mobile and retail sports betting to the region. Meadowlands Racetrack and Tioga Downs Chairman Jeff Gural made the following comments about this long term partnership, according to an official press release:

“Sports betting is a great opportunity for Meadowlands and Tioga Downs. We went through a diligent process and reviewed several options to provide customers with the best sports betting experience possible.  In the end, Betfair’s world leading products and experience proved the best choice.  We are eager to get started with our partners, with whom we have had a long relationship for racing with TVG, on this exciting venture.”

Paddy Pub Betfair owns TVG, which is an online site for horse betting and a TV network dedicated to horseracing. This platform will definitely help boost the visibility and reputation of Meadowlands Racetrack and Tioga Downs.

Additionally, Betfair is presumably setting up FanDuel as their online platform for sports betting in the United States. Already having at least 5 to 6 million subscribers, FanDuel provides an established customer base for any online sports betting operation.

One other significant note about this partnership, this racetrack is located right near MetLife Stadium where both the New York Jets and the New York Giants play. It’s a major strategical location that could help to expand Betfair’s sports betting operations throughout the Mid-Atlantic region.

Following in DraftKings’ Footsteps

With all of the excitement over Betfair and Meadowlands Racetrack, let’s not forget that DraftKings has already established the first sports betting partnership in New Jersey. On June 1st, DraftKings signed a deal to partner with the Resorts Casino Hotel in Atlantic City. DK brings a customer base of nearly 10 million users, which will definitely help give this sports betting deal plenty of firepower.

Sports Betting in New York

With Delaware already taking bets, New Jersey on the cusp of sports betting freedom, and West Virginia not too far behind, New York is on the clock in more ways than one. For starters, just like any other state, New York wants to roll out a sports betting framework that will allow the state to start reaping the financial benefits.

Secondly, and probably even more urgent than the first reason, the New York General Assembly adjourns on June 20th. That gives state politicians about a week and a half to get this whole sports betting legislation figured out. And, guess what, there aren’t many people who think that New York can accomplish this in such a short period of time.

You can count New York Governor Andrew Cuomo as someone who doesn’t think .  According to the Democrat & Chronicle, Cuomo made the following comments:

 “We’ll do an economic analysis and a legal analysis, but nothing’s going to happen this year [on sports betting] because there’s literally just a number of days left in the legislative session and this would be a very big issue to tackle.”

New York, you are dropping the ball and it’s not even New Year’s Eve.

The third strike against New York’s current position on sports betting is the conflicting parties involved. These parties represent opposite thoughts on the topic, which will most likely produce an all-out political battle over sports betting in 2018.

Conflicting Sports Betting Bills

In classic New York fashion, the state is battling it out over which sports betting bill to approve. In one corner we have Pretlow’s bill and in the other corner we have Bonacic’s bill. And wouldn’t you know it, they’re both from opposite political parties and their fellow party members are bickering over which bill to approve.

The Bonacic Bill: Republican Senator John Bonacic is the Chairman of the Senate’s Racing, Gaming and Wagering Committee. He’s actually been working on a sports betting bill for some time now. After SCOTUS overturned PASPA last month, Bonacic looked over his previously proposed bill and made a few technical changes to . According to Sportshandle.com, some of the highlights of Bonacic’s proposed bill are:

  • 5% tax on gross betting revenue.
  • Sports leagues get up to .25 percent of betting revenue without any strings attached.
  • Leagues responsible for monitoring players and employees in regards to sports betting.
  • Mobile sports betting.
  • Mobile betting servers need to be located at casinos.
  • Limits casinos to a max of 3 partners for mobile platforms.
  • Implements a grievance system for bettor related issues.
  • Gaming Commission can enter into interstate agreements related to betting information.

The Pretlow Bill: Democratic State Assemblyman J. Gary Pretlow submitted his last week and it has a few similarities, but also some significant differences. Here are a few highlights of Pretlow’s bill, according to PlayUsa.com:

  • 5% tax on gross betting revenue.
  • A 3-tier system for sports data usage.
  • A .25% royalty payout that requires leagues to submit a claim with the commission and provide proof on what the leagues spent on protecting the integrity of their sport. Royalty fee has a cap of 2%.

As you can see, there are points that both sides agree on, but also some key differences that will most likely prevent the state from having sports betting in 2018.

The biggest item that I would like to focus on within these two bills is that New York politicians believe that the professional sports leagues deserve a piece of the sports betting pie.

Assemblyman about this very position, according to ESPN:

“I do think they deserve something, because they produce the product. I know [New] Jersey [didn’t] want to give them a dime, because the leagues were the ones who dragged them through the courts and cost them millions of dollars. I understand their position, but it’s better for me to have the support of the leagues rather than having them fighting me.”

This is a very important position that New York is taking. Many states are flat out rejecting any kind of payout, royalty or integrity fee. However, if New York does pass a sports betting law that gives payouts to pro sports leagues, you can bet that these leagues will push this framework as a template throughout the rest of the states that are still in the planning stages.

Additionally, if New York does go through with this, I wonder what kind of “appreciation” these leagues will show to the state. Could we see pro sports leagues favoring New York for events over other states that don’t give any kind of payout or kickback? This could really turn the sports betting landscape upside down.

Betfair’s Deal with Tioga Downs

Despite the fact that New York hasn’t passed a sports betting bill as of yet, Betfair US has already ventured into the state by cutting a deal with Tioga Downs. This casino, resort, and race track is located in Nichols, New York, just above the state border with Pennsylvania. Tioga Downs is one of New York’s four commercial casinos and, as mentioned above, it’s owned by the same company that owns Meadowlands Racetrack. With 3 other casinos ripe for the picking, I wonder if Betfair US and/or DraftKings will start working on deals with them prior to any bill being passed.

Final Words on NY and NJ

New York and New Jersey are so close in proximity, but so far away on how they’re approaching sports betting within their states. And, yet, each state’s approach will have a significant impact on how other states view, create, and implement their sports betting regulations.

It’s clear that the professional sports leagues are all in favor of New York’s proposed payouts. Obviously, they’re not in favor of New Jersey’s proposed bill, which has prompted reports that these leagues are pressuring Governor Murphy to implement some kind of payout to their leagues.

Between now and June 20th, I expect a lot of fireworks going off in both states regarding the urgency of passing sports betting laws.

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