What’s Next For Online Gambling In New York? A Q&A with Sen. Joe Addabbo

Public official who helped launch online wagering in the state discusses how it could evolve
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Few public figures were as integral as Senator Joe Addabbo to helping New York launch online sports gambling on Saturday. As chair of the state Senate’s Racing, Gaming and Wagering Committee, he introduced the first legalization bill three years ago this month and ushered the process through a sudden transition in the governor’s mansion last year. We tracked down Sen. Addabbo, a Democrat from the 15th Senate District, for a Q&A on the recent launch and what the future holds for New York sports wagering.

New York Online Gambling: Let’s begin with the obvious one. How was the launch of mobile sports gambling good for the state?

Addabbo: Two reasons. One, watching New Yorkers go to New Jersey … Every year, roughly $120 million or $130 million go from New York to New Jersey, so we’re losing that revenue, that educational funding, so that was frustrating me. They were doing it unsafely. If we wanted to help someone with an addiction, we couldn’t, because we didn’t know who they were. They were doing it illegally, they were doing it in Pennsylvania, New Jersey, so that frustrated me.

Second, what we stand to gain by doing it Saturday is significant revenue. The gaming industry in New York gives $4 billion, roughly, every year to education. That’s significant. We’re going to increase that, increase jobs, raise $6 million more for addiction services, $5 million in funding every year for youth sports. Even if you’re not in favor of legal sports betting or you’ll never place a bet or you don’t even like sports, you probably stand to benefit somehow from mobile sports betting starting.

What are some concerns?

NYOG: In your conversations with constituents, both those in favor of it and those opposed, what are the primary concerns of the current structure?

Addabbo: I can now have my coffee in peace, because I would get to the local coffee shop in Queens and have my constituents saying, “Joe, we’re tired of going to Jersey. When are we going to do it here, when?” I get the emails, but the coffee got me, because now I know I can have my coffee in peace. The constituents who approach me there are going to be happy that they don’t have to go to New Jersey now.

Of course, I have those who are concerned because it’s gaming, but I say, “Look, we already have gaming in New York. We already have gambling. We have casinos, we have racinos, we already have sports betting, you just have to do it in person.” So, we’re not recreating the wheel. We put language in the bill that are safeguards and measures to ward off problematic gaming and addiction. That plus the $6 million each year for programs. We always have to address the issue of problematic gaming whenever we talk about the expansion of gambling in New York.

NYOG: Just curious, are you a sports gambler?

Addabbo: Nope, I’m not. That’s the problem. The funniest thing is I’ll probably never place a mobile bet. I love to play. I love to play football. I love to play baseball. I’m an avid sports watcher. This is not about me. It never was like, “I can’t wait to sign up.” No. I have staff members and friends who can’t wait, but no, not me.

Can the five operators awaiting launch catch up?

NYOG: Some people seem to expect the four operators who are already cleared and the five who follow to be willing to take losses early to seize market share. Do you think the heated competition will lead to good opportunities for gamblers?

Addabbo: No question. Competition makes for a better product for the savvy New York bettor, but there again, I don’t have to watch a Mets game any longer and watch this commercial for mobile sports betting on TV. Here I am watching a New York baseball game and this commercial comes on and I know it’s targeting New Yorkers to go to New Jersey. Now this commercial will be for New Yorkers. This is a residual benefit for the state to those commercials and that marketing.

I have told those who have a concern about addiction that, yes, we probably will see an increase in calls regarding gaming addiction, but we’ll handle it. That’s something we have to do. That’s something we will address.

NYOG: When do you expect the five other operators to be online and taking bets?

Addabbo: Given the expectation in the industry, their professionalism and success, I don’t think the ones that [haven’t started] will be too far behind. They know it’s New York. They know it’s a great opportunity. I think they’ll soon follow. Well before the Super Bowl, I think they’ll all be up and running.

NYOG: How important do you think the head start was for the four operators currently taking bets?

Addabbo: I think it was critical that they start as soon as possible. I give a lot of credit to the gaming commission and the [Gov. Kathy] Hochul administration for starting so early, a week before the playoffs. It was important because you want to get people slowly acclimated to the product.

Remember, we’re asking people to do two things and it’s not easy. I call it the switch-and-stay. Stay out of Pennsylvania, out of New Jersey, out of the illegal arena, try our product in your own state, and then stay with it. To have success, we need sustainability, that long term these bettors stay with us. Very important to get them started well before the Super Bowl.

NYOG: Much has been made of New York’s national-high 51% tax on these gross gaming revenues. Do you expect pressure from the operators to revisit that?

Addabbo: I hope it’s a non-issue. If we reach our maximum potential in New York, including the potential to eclipse even New Jersey at some point, this becomes a non-issue because of the volume. We have a population that’s double that of New Jersey. We have a solid tourism base and we have a very savvy New York bettor. We also have the fan base. Many people perceive us as the sports capital of the world, so New York has a lot riding on it, but I think the potential exists and that’s why I don’t think it’s such an issue, because again, the volume will be there.

NYOG: How do you think the products will evolve if we compare to what they look like in these early days to what operators might be offering online in six months or a year?

Addabbo: We’ll evaluate it after the Super Bowl, after March Madness, and maybe six months later. We’ll keep evaluating it. In this budget that’s upcoming in April, I’m already about to talk about how we can improve it right away to incorporate horse racing into the mobile sports-betting apps. I believe horse racing is a sport. Right now in New York, you have to get off one app to get on another app to do horse racing and that shouldn’t be. That’s unacceptable. So, really how do we marry the two? I’ll start to have that conversation in this budget.

The legislation sits in our committee. I don’t want it to be a bill that sits in our committee. I want it part of the budget, because there is a fiscal benefit to our state. So, therefore, it will hopefully be part of the budget process.

NYOG: Can you expand on the benefits to the state if you are able to get those two wagering processes unified?

Addabbo: It makes it a more efficient product and, of course, revenue.

Revenue initially projected at $250 million

NYOG: Speaking of revenue, can you offer any projections about what the arrival of online sports gambling will mean in terms of raw numbers this year?

Addabbo: It’s a very popular question. I tend not to answer it, because I remember when New Jersey first started, they overestimated revenues and so, when the actual numbers came in, they go, “Oh, look, this is a failure.” Now there’s not a person walking around who looks at New Jersey as a failure when it comes to online sports betting. They’ve been very successful, so I will be cautious here.

Look, we could have the potential of doing about $250 million early this year in mobile sports betting. There are industry analysts who say, “Oh, New York and its market? You’re looking at $1 billion in revenue.” I just know that we have great potential. I’m confident we’ll hit our potential and, if that’s the case, that’s a lot of revenue that we’re losing right now to other states.

Photo: Tariq Zehawi/USA TODAY

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