The passage of recreational sports gambling in New York has created a legal grey area. The state legislature legalized online sports gambling in April 2019 and many have already taken advantage of this new opportunity. However, the New York State Gaming Commission seems to disagree as to when online sports betting is actually legal. The following explains the current legal status of online sports gambling in New York.
The 2019 New York State Legislative Sports Gambling Legislation
In April 2019, New York State passed legislation allowing for the legalized operation of casinos and racetracks, as well as the sale of lottery tickets, on the World Wide Web. This legislation, which was commonly referred to as the “sports gambling” bill, was intended to simplify the way sports betting operations are run in the state. Before the new legislation, there were already a large number of “sports bookies” in New York that would place bets for individual clients. The new law allows for the creation of “sportsbooks” that will operate on the Internet and allow for remote wagering.
According to the legislation, legal sports gambling in New York will be up to five years in the making. The law allows for the licensing of online gambling companies that wish to operate in the state, as long as at least 50% of their annual revenue comes from wagering at casinos, racetracks or lotteries. Existing bookmakers and other illegal sports betting businesses will not be affected by the new law. The legislation also provides for the taxation of sports wagering, with taxes levied at 12% on winnings and 50% on losses.
The New York State Gaming Commission’s Position
The New York State Gaming Commission is responsible for overseeing the implementation of the state’s new legal gambling policies. The legislation granted the commission the authority to issue licenses for the operation of online betting companies in the state, along with the power to set the terms and conditions of those licenses. The commission also has the ability to punish a licensee or an individual associated with a licensee for violating those terms and conditions. As of September 2019, the commission has not issued any licenses for the operation of online sports betting, even though the law took effect four months earlier.
Commission spokesperson Jessica Balboni explained the rationale behind the commission’s current approach:
- The legislation provides for a five-year transition period from April 2019 to March 2024, during which time the commission will issue licenses for sports betting, providing the companies comply with all licensing requirements.
- The commission is focused on implementing the law in the best and most efficient way possible, while also protecting consumers and establishing a strong foundation for the future growth of legal sports gambling in the state.
- The commission is taking a cautious approach and will not rush to issue licenses, in order to ensure all the requirements are being met.
- The commission is relying on existing safeguards, such as sports bookies, to prevent operators from taking advantage of consumers.
How Does Current Law Affect E-Sports?
One of the primary purposes of the new legislation was to legalize online sports gambling and create a safe and regulated environment for those involved in the industry. The law also created a five-year transition period during which time existing online sportsbooks would have to become fully licensed. However, since the law was passed, the commission has not required online sportsbooks to become licensed.
It’s important to note that the commission has the authority to issue those licenses, but does not have to do so. According to Matthew Cheah, CEO of sports betting company DK Republic, this appears to be an oversight and the law should be interpreted to include e-sports.
- E-sports are played and administered via electronic devices, such as computers or mobile phones. These devices can access the Internet, so they can be used to participate in tournaments or leagues with other players around the world.
- E-sports are a form of “digital gaming” or “digital sports gambling” and are considered a “recreation” under the Unlawful Internet Gambling Enforcement Act (UIGEA).
- As a result of this, the operators of unlicensed online sportsbooks that provide services to residents of New York may be exposed to legal action. If you’re an operator of an unlicensed online sportsbook that provides services to residents of New York, we recommend you find a qualified legal professional to provide you with sound advice regarding your potential legal exposure.
Is International Racing Now Legal In New York?
The sports gambling law also creates a new category of wagering – known as “international racing” – where bets are placed on sporting events that take place outside the state but have an effect within it. Specifically, the law provides that bets placed on a “nationally recognized racing series” will be considered to be placed on an “international” race. That category will be available starting in October of this year.
This is a significant development for New York, which has been trying to attract more international visitors and residents. The state hopes the new law will help stimulate tourism and gaming industry growth. For example, international visitors accounted for 6.7% of the total gaming revenue in New York in 2018, according to the state comptroller’s office.
State government officials have predicted that the new law will generate almost $500 million in added state tax revenue over the next five years. They also anticipate that the new law will attract new and existing businesses to the state and create tens of thousands of jobs. However, all of this will require a considerable amount of effort to be put into proper regulation and oversight. That’s where the commission comes in.
The above article gives you the basic information you need to know about legal gaming in New York. Online betting is a growing industry in the state and one that could bring in a lot of revenue and create a lot of jobs if properly regulated and supervised. The law creating web-based gaming in New York is seen as a major step forward by many in the state’s gaming community, which hopes to grow and develop the industry even more.