We celebrated the news on Wednesday that New York governor Andrew Cuomo pivoted and is now pushing the legalization of mobile sports betting as the state faces considerable budgetary issues due to COVID-19. We thought the news would be great for sports and sports media businesses. However, that probably won’t be the case if Governor Cuomo rams through the implementation the way he says he prefers, which is to have the state run the business through its lottery arm.
“We want to do sports betting the way the state runs the lottery where the state gets the revenues,” he said Wednesday, via Legal Sports Report. “Many states have done sports betting, but they basically allow casinos to run their own gambling operations. That makes a lot of money for casinos, but it makes minimal money for the state. And I’m not here to make casinos a lot of money. I’m here to raise funds for the state. So we have a different model for sports betting.”
We are in, like, the second or third inning, so it’s not yet the time to overreact. Maybe he is posturing for leverage in negotiations with sportsbooks over what type of taxes they will have to pay. In that case, fine, whatever. However, if he is serious about doing it this way, it will spell some ugly-looking betting lines for the citizens of his state.
We have a glimpse at what giving the New York state lottery a monopoly on sports betting would look like, based on a similar model that exists in Montana. This past May, USBets.com highlighted the egregious VIG the Montana lottery was taking:
In states that actually have competition, you see both sides of a line at -110 (risk $110 to win $100). In some cases, you might see one side at -115 and the other at -105. In Montana, you had -111/-125 or -118/-118. This system may indeed provide more revenue for the state than opening up the gambling marketplace to legitimate competition, but it also requires your own citizens to pay more money to bet. Such a system does not really accomplis anything other than transfer money from the people to the government. If you live in or near New York, it would be in your best interest to be vocal about the fact that running sports betting through the state lottery is a bad idea.