Published: June 3, 2018

Gambling world descends on Albany to get sports betting law OK'd

ALBANY – On Thursday, at a private club two blocks from the state Capitol, a group of executives from casinos, racetracks and off-track betting corporations in New York gathered.

A main topic for discussion: how to get everyone on the same page in order to present a united front to advance an intense lobbying campaign underway at the Capitol to legalize sports gambling in New York before state lawmakers end their 2018 session on June 20.

It is a matter that has drawn the interest of gambling executives from downtown Buffalo to midtown Manhattan and elsewhere in New York, as well as Toronto, Boston, Las Vegas, Malaysia, Gibraltar and Great Britain.

As seen in the past, a major new plan to expand gambling opportunities in New York has spawned another battalion of lobbyists dispatched by dozens of gambling interests willing to pay $15,000 to $30,000 apiece per month to have their sports gambling desires pushed at the Capitol, according to a review of dozens of public lobbying records and interviews with gambling executives and lobbyists. Most did not want their names made public.

It is a short sprint for the gambling interests with the end of the legislative session now in sight. But the players have been preparing for this day in anticipation of a long legal fight in the United States to get sports gambling legalized. The U.S. Supreme Court’s ruling on May 14, which lifted a federal ban on sports gambling, has set off a full-blown lobbying firestorm in Albany.

A who’s who of gambling interests

Past gambling fights have brought in many stakeholders. But this may have the biggest number of players, all represented by Albany’s top-shelf lobbying firms.

In the lobbying mix are the state’s four new commercial casinos. There are the eight racetrack-based casinos, called racinos, such as those in Hamburg and Batavia. There are the state’s five off-track betting corporations, such as Western Regional OTB, which is owned by 15 counties and the cities of Buffalo and Rochester. And there are the state’s three Native American tribes with casino operations, including the Seneca Nation, which sources say all are in talks in Albany about the future of sports gambling.

That’s just a start. Also on the scene – many months ahead, in most cases, of the unsurprising Supreme Court decision – are out-of-state casino interests, casino vendors and fantasy sports companies like DraftKings and FanDuel. There are racing interests, including tracks, horse owners, trainers and breeders.

In the hunt in Albany are global online gambling companies, such as TSG Interactive Services, which is paying two lobbying firms $15,000 a month apiece; the firm, on state lobbying records, has an address on the Isle of Man in the Irish Sea but is part of an international online gambling company headquartered in Toronto. Another global player with a presence in Albany now is Hillside (Sports) GP, which in their own lobbying filing gives an address near the Rock of Gibraltar but is part of a larger global conglomerate based in central England.

Joining them all are the pro sports leagues. Out front is the National Basketball Association and Major League Baseball, which last week brought former New York Yankees manager – and sports gambling supporter – Joe Girardi to the Capitol to chat and be photographed with lawmakers; the former Yankees’ legend tour continues Monday when Hall of Famer Joe Torre, now a top MLB executive, is expected at the Capitol.

On the sidelines somewhere is the National Football League, which appears to be focusing its efforts on a federal sports gambling bill in Washington, and the National Hockey League. Pegula Entertainment Sports, owners of the Buffalo Bills and Buffalo Sabres, declined to comment on the matter. Also said to be closely monitoring are groups representing professional golfers, NASCAR and the NCAA.

Large and small, all those players see a single thing in sports gambling: lots of money brought in by lots of gamblers, especially younger ones who don’t now go to casinos or tracks, and who can only now bet on sports contests via illegal or friendly wager means.

The stakeholders agree on the financial stakes. The disagreements flow from there.

Most entities want the state to include online gambling, the equivalent of providing a mini-casino in the pocket of every New Yorker who carries a smartphone.

But there are differences over how many branded online operators, or skins, that a New York casino might be able to contract with to accept online sports wagers. The debate also continues over whether pro leagues will get what they are calling an “integrity fee” – which would come one way or another out of the gambling revenues. Some casino operators say the fee levels being discussed in Albany were selected arbitrarily and amount to corporate welfare for sports team owners.

Also yet to be settled is how revenue splits are made among the state, the operators and online sports book operators.

Another issue: Should the state, as pro sports leagues want, limit the data used by sports gambling operators to make up various betting scenarios to what the NFL, MLB, NHL, NBA and other pro leagues supply?

“That gives the leagues too much control,’’ said Mike Kane, executive director of the New York Gaming Association, a trade group of current casinos and racinos in the state.

Another major issue: How does the state OK online sports gambling and not violate gambling exclusivity deals with three Native American tribes? If the Seneca Nation has an exclusive deal with the state to offer casino games in a large region that stretches to east of Rochester, doesn’t a wager made by someone sitting in the stadium watching a Buffalo Bills game violate that compact? The Seneca Nation declined to comment on specific issues, and would say only that it is continuing to follow the talks.

The Oneida Indian Nation, operators of three casinos in central New York, already has said it will move ahead with sports gambling offerings. Joel Barkin, a spokesman for the tribe, said there are “serious questions” that have to be addressed before New York advances any sports gambling initiative, “including how mobile sports betting would violate existing exclusivity agreements between the state and the Oneida Indian Nation.’’

Two of the four new upstate non-Indian casinos sought a financial bailout from the state this spring because of under-performing operations, and some track-based casinos have seen declining betting handle. Barkin said the upstate gambling economy “is in a tenuous position” and that a rushed sports betting law “would throw this already fragile situation into full chaos.’’

A rush to passage?

As the pro-sports gambling forces tangle over how a law might be crafted, getting little attention so far are concerns from people who say New York is, again, not paying enough attention to a proliferation of gambling within its borders and more gambling addicts as a result.

Les Bernal, national director of the Washington-based group called Stop Predatory Gambling, said New York politicians have become addicted to state-sanction gambling expansion. “This is the kind of prime example of how our financial system is rigged against everyday New Yorkers. This sports gambling bill isn’t being done to benefit New Yorkers. It’s being done to benefit a handful of already privileged insiders at the expense of everybody else,’’ Bernal said.

“What New York politicians are trying to do is push a full-scale, Las Vegas casino into every home, dorm room and smartphone in the state of New York,’’ he added.

Five years ago, when voters statewide legalized up to seven new casinos in New York, state lawmakers and Gov. Andrew M. Cuomo approved a law permitting sports gambling at the casinos – four have since opened – provided the federal ban gets lifted by Congress or the courts. That has now happened, though sports wagering at those casinos can’t happen until Cuomo’s regulatory agency issues rules governing the betting.

Some people involved in the discussions say any sports gambling should be limited at first. One idea is that the gambling be limited to the four casinos, and that they be allowed to enter into “affiliate” deals with the racetrack-based casinos and OTBs. That would have the effect of making sports wagering available in some 200 outlets across the state, according to Kane. Most insiders agree the track-based racinos and OTBs would, however, be restricted – without a change in the state constitution – from offering anything more than sports betting kiosks that would be owned and operated by one of the four new commercial casinos.

Henry Wojtaszek, president of Western Regional OTB, attended Thursday’s meeting among gambling executives at the private University Club in Albany. He said the different players at the meeting – which did not include pro sports league representatives – are close to a consensus position to be able to use in lobbying the Legislature.

For his part, Wojtaszek said any law should require gamblers to be physically present at an OTB, casino or racino when initially enrolling in a sports gambling program. The OTB runs 17 betting parlors and 30 “EZ-Bet” locations at restaurants and bars that could be eligible to offer sports wagers.

“We see this as the opportunity to enlarge the revenue stream,’’ he said of revenues the OTB is required to share with localities.

Whether sports betting is made legal this month is uncertain. New Jersey is tentatively set to begin sports gambling on June 8, an event gambling lobbyists will use as ammunition, especially with downstate lawmakers, to push their cause in New York. Cuomo has said he believes there is not enough time to adequately craft a sports gambling bill. Moreover, the state Senate is in the midst of a partisan war that has blocked any bills from passage since May 16.

Given all that, “It will be extremely difficult for anything to happen legislatively in that time frame,’’ said James Featherstonhaugh, a veteran gambling industry lobbyist in Albany and part owner of a harness track and casino in Saratoga Springs. “I don’t know that it’s impossible, but personally I feel it’s unlikely.’’

But gambling, as much as any issue at the Capitol, has long had a way of miraculously coming together in the final hours of legislative sessions.

© Public Gaming Research Institute. All rights reserved.