New York’s voters approved a constitutional amendment in 2013 permitting upstate casinos, and the state legislature that year authorized sports betting in case there was a future change in federal law. That opportunity arose last May when the Supreme Court overturned PASPA.
The state’s gaming commission approved regulations on Jan. 28. A few more procedural steps remain with sports betting likely beginning in April or May. The 2013 law states that “an operator shall accept wagers on sports events only from persons physically present in the sports wagering lounge,” but some legislators are arguing that the presence of servers in the casinos should be sufficient to enable mobile sports betting throughout the state.
Assemblyman Gary Pretlow espoused the idea at the ICE Sports Betting USA conference in New York last November, saying, “If the server is in the casino, then it’s my view that the bet takes place inside the casino even if the customer is initiating the bet in Montauk Point or Westchester.”
State Senator Joseph Addabbo Jr., who is chairman of the Committee on Racing, Gaming and Wagering, said the same in an interview. Addabbo has introduced a new bill that would add explicitly mobile sports betting but hopes the existing language is sufficient.
“It’s about interpretation,” Addabbo said. “We have a starting point here where our executive budget from the governor and the gaming commission issue regulations and they say we can only do sports betting without the mobile component in the four existing [commercial] casinos.
“I tend to think, personally, that that’s a narrow view, and I’m hoping that we can start some negotiations where we can say that, if the servers are in the four casinos, can we offer mobile sports betting? The reason being, personally, I look to maximize the potential of sports betting and mobile sports betting in our state now and certainly going forward.”
Addabbo noted the state’s roughly $3 billion deficit and sports betting’s potential to help close that gap through taxation. “Here’s our chance,” he said. “We can raise revenue, we can create jobs, we can increase funding for education. It’s all right before us. Let’s not drop the ball. Let’s make sure we get all we can out of sports betting.”
Legal opinions vary about the viability of this interpretation. Gaming law expert Daniel Wallach, a cofounder in New Hampshire Law’s Sports Wagering and Integrity certificate program, said that further legislation enactment is likely necessary for online sports betting.
“Under that plain-language interpretation, you’d be hard-pressed to say mobile is expressly or even implicitly included in that. But that could be interpreted a different way by the New York Gaming Commission,” Wallach said, adding later that permitting mobile under the 2013 statute is possible, but complicated: “It could be argued logically that if the server is located within the state and the bet is deemed placed and received where it’s ultimately received, you can thread that needle. But to be on the safe side, certainly clarifying legislation would remove any and all doubt.”
New York is not the first state to make such an argument. The two houses of Michigan’s legislature passed a bill that was ultimately vetoed by the governor that authorized internet gaming so long as the “facilities, equipment, and personnel” are located “on the premises of the internet gaming licensee’s casino.”
“If New York lawmakers are looking to authorize mobile sports wagering via a requirement that all servers must be in-state, they will likely look to Justice Thomas’s concurrence in the recent Supreme Court sports betting case for support,” Ryan Rodenberg, an associate professor at Florida State University, wrote in an email. “Justice Thomas expressed doubt that Congress could prohibit intra-state sports betting and cited a 150 year old Supreme Court case in support of his conclusion.”
The budget director for Governor Andrew Cuomo has said an amendment to the state constitution is required for the legalization of mobile sports betting, according to a report from the Democrat and Chronicle. That takes years, however, and legislators like Addabbo don’t want to lose out on helpful deficit-closing income for the state.
“I love the process, in and of itself, but when you’re looking for revenue and educational funding, I don’t want to waste three years of what could be potential revenue,” he said of a possible amendment.
On this count, there seems to be stronger legal backing. Wallach pointed to Article 1, Section 9 of the state constitution, which only discusses types of gambling (like horse racing or lotteries).
“The New York constitution doesn’t parse delivery channels,” Wallach said. “It addresses broad categories of gambling only.”
That means new legislation could implement mobile betting much sooner than another amendment.