This morning, the U.S. Supreme Court overturned the federal Professional and Amateur Sports Protection Act, which dates back to 1992, and is known as PASPA. PAPSA prohibited most States, including NJ and NY, from allowing sports betting. For a good analysis of the decision (understandable for the non-lawyer) see the premier weblog covering the Supreme Court, SCOTUSblog, “Opinion Analysis: Justices strike down federal sports gambling law“. The Court decision is called Murphy [as Governor of New Jersey] v. NCAA; click here for a pdf. version of the full opinion.
This website will surely treat this topic again, to see how it impacts NYS and especially commercial casinos such as Rives Casino at Mohawk Harbor. Two important points (and see the Red Check below for updated information from theTimes Union):
- Under the current gaming law, only full casinos may offer sports betting once it is legal under federal law. They must get a specific license for that. “Racinos”, such as the Saratoga Casino, already have let it be known that they want a law letting them do it, too.
- Under the current NYS Gaming Law, slot machine revenues at Rivers Casino are taxed at a 45% rate, and any other type of gaming revenues are taxed at 10%. And, according to the Times Union, “State Senate Racing, Gaming and Wagering Committee Chair John Bonacic carries legislation that would . . . impose a state tax of 8.5 percent on sports wagering gross revenue.” So, if Rivers Casino slots players move a significant amount of their money over to the Casino’s Sports Betting lounge, or another Sports Wagering location (including online offerings), tax revenues from Rivers may decline, despite more betting go on at the Casino. Naturally, Rivers Casino hopes to lure sports bettors into other parts of the Casino, adding to gaming revenues.
Before 11 AM today, the Albany Times Union put online a good, short explanation on the possible impact on NYS casinos and racinos, in “Supreme Court ruling opens prospect of NY sports gambling: Four major NY casinos may be able to offer sports books” (by David Lombardo, online May 14, 2018). Here are excerpts from the TU article:
The state law that allowed commercial live-table casinos in New York included a provision authorizing wagering on sporting events if the federal law was found unconstitutional or changed. Casinos must have a license specifically to offer sports gambling and gambling on sports can only be offered in “lounge” areas at a casino.
. . . Under current law, gambling operators besides the commercial live-table casinos, such as NYRA, the Saratoga Casino Hotel and Capital OTB, would be shut out from offering sports betting. But legislation from Sen. John Bonacic, an Orange County Republican and chair of the state Senate’s racing committee, would allow those operators to act as affiliates to the casinos and offer sports wagering.. . James Featherstonhaugh, a minority owner in Saratoga Casino Hotel, anticipated the state Legislature could begin working on legislation addressing sports gambling this week.
- “Gambling operators and state legislators in New York are scrambling to craft a new regulatory framework”
- ” The state Gaming Commission must also adopt regulations and issue a sports gambling license before the casinos could offer sports wagering. That process will likely be preempted by the state Legislature and Gov. Andrew M. Cuomo. . .Cuomo, speaking to reporters in Manhattan on Monday, rejected the idea that sports gambling in New York could be rolled out using the broad framework crafted in 2013. He said a new law was needed if the state wanted to proceed with sports gambling.” “We’ll do an economic analysis and a legal analysis, but nothing’s going to happen this year because there’s literally just a number of days left in the legislative session and this would be a very, very big issue to tackle,” Cuomo said.
- The only local player with the potential to offer sports gambling under current law is the Rivers Casino & Resort in Schenectady, which has been eagerly preparing for the Supreme Court decision, according to their parent company, Rush Street Gaming.”We look forward to adding sports betting across all our gaming platforms as soon as possible,” Rush Street Gaming CEO Greg Carlin said in a statement.
- State Senate Racing, Gaming and Wagering Committee Chair John Bonacic carries legislation that would allow for sports gambling on online platforms, impose a state tax of 8.5 percent on sports wagering gross revenue, collect fees for the operators of sports leagues, and authorize gambling on college sports.
follow-up (1 AM, May 15, 2018): The Schenectady Gazette put up a comprehensive piece online this evening. See “Sports betting legalized, will be added in Schenectady as soon as possible“, by John Cropley. In the article, both Greg Carlin of Rush Street Gaming and Schenectady Mayor Gary McCarthy say they want to bring sports betting to Schenectady as soon as possible. In a comment to the Gazette article, I raised the same theme as above on the questionable size of any increase in overall tax revenues to be paid by Rivers:
[Comment by David Giacalone:] Mayor McCarthy is already counting chickens early and praying for golden eggs. If enough slots betting (taxed at 45%) is instead bet on sports (taxed at 5 or 8.5 or 10%), taxes paid by Rivers Casino to the State may amount to a lot less than expected, even if Rivers revenues rise. Grandpa and Uncle Joe might just head for the Sports Wagering Lounge at Rivers, leaving Grandma and Aunt Tillie at the slots; or, all four of them might decide that sports wagering can be a lot more stimulating than a slots trance. As a result, former slots players might generate a lot less tax revenue even though visiting Rivers Casino as often as before.
I know why Rivers Casino wants to start sports wagering ASAP, but I am not so sure why the Mayor of Schenectady is in such a big hurry.
- In a related matter, in case you missed the news, as of May 4, 2018, Capital OTB now has a branch inside Van Slyck’s Bar at Rivers Casino.
Today’s ruling could also have a much broader reach, potentially affecting a range of topics that bear little resemblance to sports betting. For example, supporters of so-called “sanctuary cities” – cities that refuse to cooperate with federal immigration officials to enforce immigration laws – have cited the 10th Amendment in recent challenges to the federal government’s efforts to implement conditions on grants for state and local law enforcement. Challenges to the federal government’s recent efforts to enforce federal marijuana laws in states that have legalized the drug for either recreational or medical use may also be based on the 10th Amendment.
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