Is it game on for sports betting in New York?

Sports betting in New york
Sports betting in New york
Graphic by Alex Law

Is it game on for sports betting in New York?

State lawmakers confront legal complications in the rush to allow gambling on games.
June 18, 2018

When New York lawmakers expanded casino gambling in 2013, Assemblyman J. Gary Pretlow had a premonition. He snuck in an amendment to allow sports betting at casinos in the state if the federal ban on sports betting was ever lifted in the future. So when the U.S. Supreme Court declared the federal ban unconstitutional earlier this year, he and other lawmakers rejoiced – but perhaps too soon. A bill pending in Albany to expand sports betting may face another constitutional challenge.

“There are real issues as to whether or not under the existing constitution you can expand sports gambling to sites other than the physical locations of the casinos,” Bennett Liebman, a legal expert who previously served as the state deputy secretary for gaming and racing, told City & State.

The state Senate version of the bill would add regulations and extend betting to off-track betting corporations and racetracks and allow casinos to host online betting apps. The state constitution only authorizes gambling on-site at the resort-style casinos allowed in the 2013 law, and has no provision allowing online gambling.

State Sen. John Bonacic, the chairman of the Racing, Gaming and Wagering Committee and the bill’s sponsor, insisted that there was no constitutional conflict with his bill, which uses a combination of technology and branding to avoid issues with location restrictions on gambling. His bill would allow the state’s four upstate casinos to build branded kiosks that would offer sports betting at other sites, such as off-track betting parlors.

“There’s no constitutional amendment needed to put a kiosk in an OTB and a racino because the brand name would be the casino’s name,” Bonacic told City & State.

Passing a constitutional amendment would be a strenuous task, as it would need to be passed in consecutive state legislative session and then by a majority of voters in a ballot referendum. Although no legislator has introduced a bill for a constitutional amendment yet, Assemblyman Joseph Lentol recently expressed confusion over the bill’s constitutionality even though he otherwise supports it. State Sen. Joseph Addabbo said the Senate’s legal team was going through the bill to prevent any constitutional conflicts.

“People aren’t going to drive 20 or 30 miles to bet on the Yankees if their sports bookie is across the street. So we have to make this available to people on a statewide basis.” – Assemblyman J. Gary Pretlow

Bonacic’s bill also requires mobile servers for any betting apps to be placed in the casinos themselves, which could bypass the argument that someone using an app to place bets is doing so outside the casino. But Liebman said this argument was constitutionally questionable. Early on in the discussion of the bill, legislators considered having players sign up in person at casinos in order to use the app. However, the bill language currently would allow users to sign up online anywhere within the state.

Pretlow, who is sponsoring the Assembly version of the bill, said that the 2013 constitutional amendment that restricted the number of casinos was not intended to be taken as a physical limitation on gambling. “The object (of the amendment) was not to localize it. That was the effect, but that wasn’t the object. The object was to make it legal in New York and at the time this was the best avenue to do that,” he said.

He added that making sports betting accessible for New Yorkers is necessary because otherwise gambling enthusiasts are going to resort to illegal betting. “People aren’t going to drive 20 or 30 miles to bet on the Yankees if their sports bookie is across the street,” Pretlow said. “So we have to make this available to people on a statewide basis.”

There are others who argue that a constitutional amendment should not be necessary because the question of sports betting is similar to that of daily fantasy sports, which were legalized in New York in 2016. The state Legislature designated daily fantasy sports as “games of skill,” which means the outcome is predominantly determined by the skill of the player rather than luck. Daily fantasy sports are therefore not considered gambling in New York.

Michael Kane, the president and executive director of the New York Gaming Association, testified to the state Senate in January that the only difference between daily fantasy sports and sports betting is that the former is based on a make-believe team while the latter is on a real one. However, sports betting is currently considered gambling, according to Liebman, and therefore not protected from a constitutional amendment under this argument.

Bonacic remains confident that his bill will pass in the Senate, but even then the bill must go through an Assembly that has historically been more resistant to pass gambling bills.

Because of the 2013 law, casinos can start sports betting as soon as the state Gaming Commission prepares the appropriate regulations, though the commission would not comment on whether it had begun working on the regulations.

Kay Dervishi
is an editorial intern at City & State.
Max Parrott
is an editorial intern at City & State.
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