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Governor Cuomo to Now Support Mobile Sports Wagering in NY

Jan 12, 2021

New York Governor Andrew Cuomo, who has consistently opposed mobile wagering in the past, will make mobile sports wagering a central part of his policy proposals during this week’s State of the State Address. This comes as the coronavirus pandemic has decimated New York’s finances and officials seek new ways to reduce a multibillion-dollar budget gap.

Meanwhile, the neighboring state of New Jersey continues to dominate the mobile sports wagering market. A 2020 Eilers & Krejcik Gaming report estimated that New Yorkers wagered $837 million in New Jersey in 2019. The report found that nearly 20% of New Jersey’s sports wagering revenue comes from New York residents who wager in New Jersey.

“At a time when New York faces a historic budget deficit due to COVID-19, the current online sports wagering structure incentivizes a large segment of New York residents to travel out of state to make online sports wagers or continue to patronize black markets,” Cuomo said.

Since the legalization of mobile and online sports betting, neighboring states have seen a steady increase in tax revenue. The emergence of mobile and online sportsbooks, such as FanDuel and DraftKings, has allowed bettors to wager from the comfort of their homes. Bettors in areas where mobile and online sports betting is not legal, such as New York City, take advantage of its neighbors’ legal sports betting. Crossing state lines to bet with sportsbooks based in New Jersey or Pennsylvania remains a practical option for most of the state’s population, which is heavily centered around New York City and the Hudson Valley. However, this pushes millions of dollars in tax revenue from New York City to New Jersey.

“New York has the potential to be the largest sports wagering market in the U.S., and by legalizing online sports betting we aim to keep millions of dollars in tax revenue here at home, which will only strengthen our ability to rebuild from the COVID-19 crisis,” said Cuomo.

Governor Cuomo’s support, however, does not guarantee that mobile sports wagering will come to New York. State legislators still need to pass a bill, but investors are hopeful. DraftKings (NASDAQ:DKNG) and Penn National Gaming (NASDAQ:PENN) both saw an early surge above 5% on January 6 after a report that Governor Cuomo will affirm mobile sports betting as a key part of his policy during this week's State of the State Address.

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Earl Clukies

Earl Clukies is a Senior Manager in the Financial Services Group with over five years of experience.

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