New York may revisit legalization of mobile sports betting after Gov. Cuomo hinted last week he might not oppose the move, looking for extra revenue for the state coffers.
Mobile Sports Betting Legalization
Cuomo suggested he might sign the bill to legalize wagering via mobile apps but according to analysts, projected tax revenue from mobile sports betting would be nowhere near enough to fill the gaping holes in the state budget, suggesting legislators should also consider the option of an integrated casino resort in the city.
Based on current market forecasts, a tax rate between 8% and 13% would result into tax revenue of between $75 million and $125 million, Carlo Santarelli, gaming analyst at Deutsche Bank told investors in a note issued on Friday.
“The taxes from sports betting would equate to roughly 1% of the annual run rate deficit. Over time, Gov. Cuomo has resisted mobile sports wagering and is said to be largely dismissive of the impact from the tax revenue stemming from sports betting in general. We largely agree with this.”Carlo Santarelli, Gaming Analyst, Deutsche Bank
New York is looking at a budget deficit of between $70 billion and $75 billion for 4 years, which could be drawn down to around $60 billion through federal aid, or $15 billion per year. A large portion of that gap could be filled by a destination resort casino, Deutsche bank analyst suggested.
“Given both the state tax ramifications, as well as the job creation, we believe the prospects for a New York City area destination resort casino are likely to appear brighter in 2021 than any time prior.”Carlo Santarelli, Gaming Analyst, Deutsche Bank
Casino Integrated Resort Timeline
Further, Santarelli pointed Queens as the probable location for such an integrated casino resort, as well as the front-runner to build the property, Las Vegas Sands (LVS).
“We believe Las Vegas Sands could spend upwards of $5 billion on this project and generate not only considerable recurring gaming tax revenue, but also add nicely to job creation.”Carlo Santarelli, Gaming Analyst, Deutsche Bank
The casino giant’s interest in moving up a 2023 timeline New York voters approved for an integrated casino resort has been no secret, especially after it hired former New York Gov. David Patterson last year to lobby for the idea.
According to a study released by LVS, an integrated casino resort in the city could generate $1.5 billion in taxes for the budget and help fund the New York Metropolitan Transportation Authority, public education and various other public needs.
So far New York allows retail sports betting only, pushing state residents to drive or take a train to New Jersey and bet on their mobile phones there, instead of keeping these funds in-house. In November, sportsbooks across the Hudson River registered a record of $931 million in sports wagers, with 94% of the bets, $872 million, placed through a mobile app or online.