New York Poised To EnterSports Betting Arena
17TH AUG 2015 | WRITTEN BY: SARA FRIEDMAN IN SARATOGA SPRINGS
If courts overturn the federal sports betting ban, New York lawmakers are prepared to allow sportsbetting to become legal under a provision included in the state’s 2013 gaming law.
The 2013 Upstate New York Gaming Economic Development Act already provides a framework for howsports betting would be regulated in the Empire State if the 3rd Circuit Court of Appeals sides with thestate of New Jersey in its efforts to allow wagers despite a 1992 federal law.“When we passed the 2013 referendum, we said if the federal government allows it then we will allow itat all of the resort casinos,” said state Senator John Bonacic at the Saratoga Institute on Equine, Racingand Gaming Law conference last week.The 2013 law allows New York’s casinos to set up sports pools on professional sports events subject toa five-year license issued by the New York State Gaming Commission.“There is a black market that is not being prosecuted right now,” said Bonacic, who serves as chairmanof the New York Senate’s gaming committee. “Once New York allowed the referendum in 2013 to pass, Ithink that our flood gates are open to all forms of gaming.”Bonacic was speaking during a panel discussion on the prospects for legalized sports betting across theUnited States and how daily fantasy sports fits into the gaming landscape.MGM Resorts general counsel John McManus said his company sees sports betting as a way to drivegrowth in the gaming sector beyond Nevada, with sportsbooks already operating illegally across theUnited States.“There is plenty of supply and nobody on the demand side is worrying about the repercussions,”McManus said of illegal sportsbooks. “As an industry that wants to provide more gaming opportunities, Idon’t know why we wouldn’t embrace it.”MGM is also interested in getting into the daily fantasy sports business, but McManus said concernsover its legality have stopped the company from entering the space so far.
Fantasy sports are protected under a carve-out in the federal Unlawful Internet Gambling EnforcementAct passed by Congress in 2006, but there are at least five states where most fantasy sports operatorsrefuse to operate due to the uncertainties over how local laws define gambling.“For us to enter the market, if we are wrong we risk losing our million-dollar buildings,” said McManusof MGM’s licensed casino operations. “If the fantasy operators are wrong in a particular state then theywill shut down in that state or move onto places where it is currently legal or not being enforced.”Still, fantasy sports operators should be more concerned about the prospect of state regulation thanprosecution, said Daniel Wallach, a gaming attorney with the law firm Becker & Poliakoff in FortLauderdale.“I don’t foresee a day when we are going to have full-scale prosecutions of daily fantasy sportscompanies because the laws are going to be changed,” said Wallach. “The long-term question is if theindustry is going to be regulated and what role the federal and state governments will have.”Just as he supports regulating online poker, Bonacic said fantasy sports operators should expect to bebrought under more formal oversight simply because fantasy sports are currently going untaxed.“If there is an opportunity for governments to tax, then they will find it,” said Bonacic. “It is just a matterof time until states see how many people are playing fantasy sports that they will find a way to regulateit.”Despite the uncertainty of how fantasy sports fall under gambling laws in certain jurisdictions, somefantasy operators see an opportunity to collaborate with licensed gaming companies.“We are trying to bring live events to the casinos with our players to do live finals,” said Timothy Parilla,in-house legal counsel for DraftKings.“Players in our demographics are also the kinds of people who like to go to casinos, and we can providea different sales model for the casino industry.”The rise of the fantasy sports industry is part of the reason why the America Gaming Association (AGA) iscurrently trying to reach a consensus between the gaming industry and U.S. sports leagues when itcomes to the future of sports betting policy.“I expect that you will see an announcement later this year with an aggressive, strong policy from theAGA that will perhaps be different what the industry has seen the past,” said AGA president and CEOGeoff Freeman during his keynote address at the Saratoga conference.“We have sat down with the NBA, MLB [Major League Baseball], NFL and owners in the various leagues,and I think that there is more common cause than there ever has been for taking a different approach tosports betting.”
17TH AUG 2015 | WRITTEN BY: SARA FRIEDMAN IN SARATOGA SPRINGS
If courts overturn the federal sports betting ban, New York lawmakers are prepared to allow sportsbetting to become legal under a provision included in the state’s 2013 gaming law.
The 2013 Upstate New York Gaming Economic Development Act already provides a framework for howsports betting would be regulated in the Empire State if the 3rd Circuit Court of Appeals sides with thestate of New Jersey in its efforts to allow wagers despite a 1992 federal law.“When we passed the 2013 referendum, we said if the federal government allows it then we will allow itat all of the resort casinos,” said state Senator John Bonacic at the Saratoga Institute on Equine, Racingand Gaming Law conference last week.The 2013 law allows New York’s casinos to set up sports pools on professional sports events subject toa five-year license issued by the New York State Gaming Commission.“There is a black market that is not being prosecuted right now,” said Bonacic, who serves as chairmanof the New York Senate’s gaming committee. “Once New York allowed the referendum in 2013 to pass, Ithink that our flood gates are open to all forms of gaming.”Bonacic was speaking during a panel discussion on the prospects for legalized sports betting across theUnited States and how daily fantasy sports fits into the gaming landscape.MGM Resorts general counsel John McManus said his company sees sports betting as a way to drivegrowth in the gaming sector beyond Nevada, with sportsbooks already operating illegally across theUnited States.“There is plenty of supply and nobody on the demand side is worrying about the repercussions,”McManus said of illegal sportsbooks. “As an industry that wants to provide more gaming opportunities, Idon’t know why we wouldn’t embrace it.”MGM is also interested in getting into the daily fantasy sports business, but McManus said concernsover its legality have stopped the company from entering the space so far.
Fantasy sports are protected under a carve-out in the federal Unlawful Internet Gambling EnforcementAct passed by Congress in 2006, but there are at least five states where most fantasy sports operatorsrefuse to operate due to the uncertainties over how local laws define gambling.“For us to enter the market, if we are wrong we risk losing our million-dollar buildings,” said McManusof MGM’s licensed casino operations. “If the fantasy operators are wrong in a particular state then theywill shut down in that state or move onto places where it is currently legal or not being enforced.”Still, fantasy sports operators should be more concerned about the prospect of state regulation thanprosecution, said Daniel Wallach, a gaming attorney with the law firm Becker & Poliakoff in FortLauderdale.“I don’t foresee a day when we are going to have full-scale prosecutions of daily fantasy sportscompanies because the laws are going to be changed,” said Wallach. “The long-term question is if theindustry is going to be regulated and what role the federal and state governments will have.”Just as he supports regulating online poker, Bonacic said fantasy sports operators should expect to bebrought under more formal oversight simply because fantasy sports are currently going untaxed.“If there is an opportunity for governments to tax, then they will find it,” said Bonacic. “It is just a matterof time until states see how many people are playing fantasy sports that they will find a way to regulateit.”Despite the uncertainty of how fantasy sports fall under gambling laws in certain jurisdictions, somefantasy operators see an opportunity to collaborate with licensed gaming companies.“We are trying to bring live events to the casinos with our players to do live finals,” said Timothy Parilla,in-house legal counsel for DraftKings.“Players in our demographics are also the kinds of people who like to go to casinos, and we can providea different sales model for the casino industry.”The rise of the fantasy sports industry is part of the reason why the America Gaming Association (AGA) iscurrently trying to reach a consensus between the gaming industry and U.S. sports leagues when itcomes to the future of sports betting policy.“I expect that you will see an announcement later this year with an aggressive, strong policy from theAGA that will perhaps be different what the industry has seen the past,” said AGA president and CEOGeoff Freeman during his keynote address at the Saratoga conference.“We have sat down with the NBA, MLB [Major League Baseball], NFL and owners in the various leagues,and I think that there is more common cause than there ever has been for taking a different approach tosports betting.”
