New York Prepares Sports Betting Bill While NBA, MLB Salivate

March 15, 2018 443 Reads
New York Sports Betting

A sports betting bill is making its way through the legislative channels this week in New York.

News broke Monday that a bill authored by Sen. Jon Bonacic and his aide (who spent a prodigious 150 hours working on the bill) made its way through the Senate Racings, Wagering and Gaming Committee (SRWGC) and will now move to the Senate Finance Committee. It’s all normal stuff for bills – committees first, then the gauntlet that is the House and Senate.

The truth is that what happens with this bill is not nearly as interesting as the massive dog-and-pony-show the NBA and MLB will put on as they try and convince lawmakers from Sacramento to Albany to give them a cut of all that’s bet on their games.

NBA and MLB ask for integrity fee

The two leagues have already revealed their greedy hand by showing up at a public hearing hosted by said SRWGC. At the meeting, they made it clear that, among other demands, they want a 1% cut of what’s gambled, something known as an integrity fee. Oh, and they also support a comprehensive sports betting bill.

Back-of-the-napkin math shows that the leagues stand to rake in $2 billion collectively from this ask should sports betting be legalized in most states. Now, states like New York aren’t going to care as much about this ask because any money brought in via sports betting tax revenue is new money.

Nevada probably hates the integrity fee

Nevada has a legit beef, though. They’ve been operating sports betting books, basically, since the government lowered their excise tax in 1975 from 10% to 2%. In 1985, that dropped down to 0.25%.

The last thing Vegas casinos want is a 1% take of their handle (dollar amount of best made), especially when the underdog wins, I don’t know, say, the Super Bowl and book revenues plummet as Zach Ertz stretches into the end zone in another Oh-my-god-is-that-a-catch-or-not moment.

A 1% cut would be more manageable; the “losses” will be much easier for Nevada books to handle.

Meanwhile, the Supreme Court doesn’t actually care about sports betting…

While all the talk of the SCOTUS decision about New Jersey’s sports betting appeal is about sports betting, the justices aren’t concerning themselves with what kind of money they can make from an 11 seed making it to the Final Four.

Their main concern is whether or not the Professional and Amateur Sports Protection Act (PASPA) is unconstitutional. When PASPA was passed in 1992 and implemented in 1993, Congress basically told states they didn’t have the right to decide their own sports gambling laws.

SCOTUS will decide if that act violated the anti-commandeering principle inherent in the 10th Amendment, which says Congress can’t pass a law that restricts state’s rights to create their own laws about non-essential matters like sports gambling.

Here’s how Dickinson Wright casino lawyer Greg Gemignani put it: “Congress can legislate that the sun rises in the West and sets in the East but that doesn’t mean it’s going to happen.”