Editor’s Note: Legal Sports Report consulted with several gambling companies and legal experts to produce this editorial article on sports betting in New York.
If pressure makes diamonds, maybe that Governor of New York and legislation should put the sports betting deal on hold because it’s far from pretty.
The “deal” is an obvious compromise between two sub-ideal (but for different reasons) proposals. The deal was announced as part of Andrew CuomoThe massive budget doesn’t seem like the best option for a competitive environment for consumers, nor does it seem like the best way to maximize revenue for the state. (Seriously, just auction a license or two if you want to maximize sales.)
Instead, there is now an overview of mobile betting (possibly ad libbed by New Hampshire), which evidently raises more questions than answers.
While it will be months before the details of mobile betting in New York become known, some overarching questions remain open to those charged with drafting this law. Most important of the themes seems to be the apparent lack of tribal gaming interests in drafting this proposal.
Time to do this law a disservice
With many still trying to figure out who is well positioned and, frankly, what the authors of the law were referring to even with parts of the law, there seems to be a growing consensus on one aspect of the bill: the lack of full tribal considerations Gambling interests in the state.
The Oneida Nation promptly warned the state that the plan threatened to undermine the settlement agreement signed with the state in 2013. While Cuomo has promised to fix the problem, the details of how Cuomo plans to do so are not exactly clear.
The Oneida Nation Settlement 2013
The 2013 agreement between New York State and the Oneida Nation was one of the most recent additions to a series of pacts between the tribal government and the state. The first agreement was made by Cuomo’s father, Mario Cuomoand the Oneida Nation in 1993.
The recent agreement between the Oneida nation and the state stipulates that the state receives 25% of slot revenue from the tribe’s casinos in Oneida and Madison Counties. In return, New York granted 10 counties in the central part of the state the exclusive gaming rights of the Oneida Nation:
Although not population centers, these counties run right through the center of the state. If an agreement is not reached on sports betting in New York, the state could be forced to geofence these counties. That seems to be the plan from now on.
Other states have geofenced tribal areas; As sovereign nations, states cannot regulate activities in the countryside. The situation in New York could mean geofencing not only of tribal areas but the surrounding counties as well.
Violating the agreement with the Oneida Nation could cost the state as much as $ 70 million annually in addition to others under the Indian Gaming Regulatory Act ((GAME) that a court could forgive if New York found a violation of the settlement.
Other compacts in question
New York state also has gaming compacts with the Seneca Nationwho have some exclusive rights west of State road 14, an area that includes buffalo and Niagara Falls. As part of their agreement with the state, the Seneca Nation was told that the governor would not support legislation to expand commercial gambling in the area 2012.
The deal with Seneca Nation, which recognized the continued operation of video lottery terminals (VLT) in the area, also brought with it an agreement that the state will enforce Western New York’s exclusive zone for casino games and a new dispute settlement mechanism will be put in place treat future disagreements amicably. “The impact of this agreement on sports betting in New York remains unclear.
More exclusivity for “casino games”?
The Saint Regis Mohawk tribe has an additional agreement with the state that grants the exclusivity of the “Legislation for Casino Gaming Locations” in a region with eight counties:
What about casino games?
One question for the agreements between the Seneca Nation and the Saint Regis Mohawk Tribe with New York is whether an expansion of sports betting is allowed under their exclusivity agreements.
It remains an unresolved question whether sports betting is, in general, casino games. Additionally, there are questions as to whether the agreements with the Seneca Nation and the Saint Regis Mohawk Tribe are related to the expansion of mobile betting.
If mobile betting violates these agreements and the governor cannot enter into a separate agreement with the tribes, the tribes may be entitled to suspend their payments for the purpose of dividing the revenue to the state. The value of the withdrawal of revenue-sharing payments to the state is likely to be in line with realistic estimates of the potential revenue that sports betting could generate in New York.
There are still many unanswered questions about sports betting in New York
In addition to the impact the existing Tribal Gaming Compacts could have on sports betting in New York, questions about where a bet will be placed remain open. Indeed, many of the theories governing the scope of contracts and the placement of a bet remain largely untested by the courts.
What seems like a simple question is actually not that clear.
While New York received a quintet of legal opinions on where to place a bet, there appears to be a possible split between federal and state law. This problem could eventually find itself resolved in the judicial system.
What about a DFS lawsuit?
As some may recall, the state’s efforts to legalize itself daily fantasy sports in New York were foiled in state courts. While the subjects are not entirely analogous, the lawsuit by private parties questioning the constitutionality of the action could provide a framework for others who wish to stop the expansion of mobile sports betting in New York.
While New York lawmakers have sought opinions on the legality of approving mobile sports betting in New York without constitutional amendment, that does not prevent an interested group from filing a lawsuit to stop the rollout and ask a court to review the constitutionality of the acts of the state.
NY sports betting resolution for all parties?
Nobody wants a lawsuit over this new law. The best scenario is for the governor and the affected tribes to come to an agreement.
The tribes hold many of the cards. Although the New York City The population center does not seem to be affected by exclusivity zones. It’s unlikely that bettors across the state would be delighted if they couldn’t bet on their phones because the governor couldn’t reach an agreement with the tribes.
New York tribes are in a powerful position. Sports betting revenue is unknown, but most experts seem to agree that Cuomo dreams of generating sports betting $ 500 million yearly.
The revenues that the tribes return to the state are real, so it seems silly for the state not to try to get a deal so as not to jeopardize existing revenues.