Gov. Cuomo to Propose Legalization of Sports Betting, Recreational Marijuana to Help Offset Billions in Lost Revenue Due to COVID-19

Gov. Cuomo to Propose Legalization of Sports Betting, Recreational Marijuana to Help Offset Billions in Lost Revenue Due to COVID-19
New York Gov. Andrew Cuomo

In a briefing with reporters earlier today (Jan. 6), Gov. Andrew M. Cuomo announced he will propose legislation to authorize mobile sports wagering as part of his 2021 State of the State message.

He will also once again advocate for the legalization of recreational marijuana in New York State as part of his State of the State message to be released beginning on Monday. The governor, due to the election of President-elect Joe Biden and the apparent election of Democrats Raphael Warnock and Jon Ossoff to the U.S. Senate, said he will be writing a more upbeat State of the State message.

He believes that the Biden administration will push through another COVID aid package that will include state and local funding that will close the state’s $15-billion budget gap that was caused by the onset of the coronavirus in March 2020.

In terms of the sports betting proposal, the New York State Gaming Commission will issue a request for proposals to select and license a sports operator or platform to offer mobile sports wagering in New York. This operator or platform must have a partnership with one of the existing licensed commercial casinos. The commission will also require any entity operating mobile wagering apps include safeguards against abuses and addiction.

“At a time when New York faces a historic budget deficit due to the COVID-19 pandemic, 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,” Gov. Cuomo said. “New York has the potential to be the largest sports wagering market in the United States, and by legalizing online sports betting we aim to keep millions of dollars in revenue here at home, which will only strengthen our ability to rebuild from the COVID-19 crisis.”

The sports gambling market is evolving rapidly. In 2018, the U.S. Supreme Court in Murphy v. NCAA overturned a federal law prohibiting most states from authorizing sports wagering. Sports wagering is now legal online in 14 states, including the bordering states of New Jersey and Pennsylvania, while it is only legal in New York at the four Upstate commercial gaming facilities and Native American gaming facilities.

An industry study found that nearly 20% of New Jersey’s sports wagering revenue comes from New York residents, costing the state millions of dollars in lost tax revenue.

In connection with possible revenue raisers, the governor when asked if he might accelerate approval of casinos downstate (Westchester, New York City) said he “has not given any consideration” to that possibility.

The governor expressed deep concern to the impact of the UK strain of the coronavirus in New York State. He noted that the highly infectious strain has the capability of “overwhelming” the hospital system.

The governor said, “It’s game over when the hospitals are overwhelmed.” He added that if the hospital systems are overwhelmed, similar to current situations taking place in California, the United Kingdom and Italy, the state would have to “close down the economy.”

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