By Patrick Connelly, originally published in Buffalo Law Journal, Buffalo Business First on Aug 22, 2019, 6:04am EDT Updated Aug 22, 2019, 11:07am EDT.
HOLD YOUR BETS
Casinos in New Jersey, on the Canadian side of Niagara Falls and some in New York already offer sports gambling options. As football season kicks off, what’s the holdup here?
Early in the evening on a random Thursday, the after-work crowd at Seneca Buffalo Creek Casino is a good one.
Around the sprawling casino floor, about 70 percent of the seats are occupied at slot machines and at tables that feature card games such as blackjack and three-card poker.
At the bars, there’s hardly an open seat to be had.
That includes Stixx, a sports-themed bar at the center of a casino without a sportsbook.
If Seneca Buffalo Creek did have a sportsbook, it’s easy to imagine a seat at Stixx would be almost impossible to snag during Thursday Night Football and other games.
The bar’s countless TVs, stadium-esque scoreboard and swanky vibe lend itself well to what’s become commonplace at modern Las Vegas-style casino sportsbooks.
That may have been intentional as Stixx bides time until Seneca Buffalo Creek opens one.
And with football season days away, preparations are underway at the casino and other Seneca Nation of Indians’ properties in Western New York.
But it’s unclear how soon the sportsbooks may open.
“We look forward to making this amenity available to our patrons in Niagara Falls, Buffalo and Salamanca,” a spokesman for the Senecas said in a statement. “Our right to offer this now-approved offering is clearly outlined in our (c)ompact. We will offer more specific details regarding our plans once we are ready to do so.”
Spokesman Brad Maione of the New York State Gaming Commission said there’s a procedure that any of the Seneca casinos must follow if they were to implement sports betting in accordance with the compact.
Whether any or all of the Seneca casinos are in the midst of that process is not public information, he said.
|Seneca Buffalo Creek will offer sports betting, but it’s unclear when.|
Sports betting is now allowed in New York after a push by Gov. Andrew Cuomo and the adoption of new rules by the gaming commission in June.
Legal sportsbooks opened at a pair of casinos in July: Rivers Casino in Schenectady was the first to take a wager and Tioga Downs Casino in Nichols followed a week later. The del Lago Casino in Waterloo will do likewise on Aug. 23.
In Western New York, however, casino-goers don’t yet have local options to place bets unless they’re willing to cross into Canada.
Even if they do, bettors in Niagara Falls, Ont., can only place parlay wagers.
Additionally, the state didn’t give permission to racinos or off-track betting establishments, which left Batavia Downs Gaming, Hamburg Gaming and Western Regional OTB out of the loop.
Legislation would be needed to grant such approval.
Despite the statement from the Seneca Nation, when or if a sportsbook opens at any of the Seneca casinos is anyone’s guess.
The Senecas and state officials continue to bicker over a portion of the New York State Thruway near Angola that is in dire need of repair.
Cuomo said Aug. 20 that negotiations have been exacerbated by a feud over casino revenue that continues to play out in legal challenges.
In a statement to WGRZ-TV, the Senecas said the issues should be separate, but Cuomo made “it very clear that he is holding one issue hostage to the other.”
“He’s playing politics with the safety of the traveling public,” the statement continued. “There are processes related to the (c)ompact that cannot be ignored, as much as the (s)tate may want to ignore them.”
Growing industry and interest
Sports betting is already a big business and is projected by experts to become a $6 billion industry in the United States by 2023.
That could be a modest forecast if numbers seen early this year stay on pace.
Together, college and pro football typically account for about 40 percent of a sportsbook’s annual business, according to statistics.
Approximately $2 billion is wagered annually on football in Nevada, which includes the Super Bowl, the most-bet event of the year.
Combined with six other states that had operational sportsbooks in January and February this year, the total income generated was nearly $95 million, according to data compiled by the University of Nevada-Las Vegas Center for Gaming Research.
Those states – Delaware, Mississippi, New Jersey, Pennsylvania, Rhode Island and West Virginia – contributed $44 million to that figure, while Nevada saw about $50 million in revenue.
As more states implement sports betting and move past the initial surge, many assume that Nevada’s annual numbers may take a dip and that gambling on sports will grow to reach what experts anticipate and even surpass those figures.
Mobile apps for bettors, already introduced and legalized in some states such as Nevada, New Jersey and Pennsylvania, will make sports betting easier for the consumer, as well.
“It’s hard to predict exactly what’s going to happen in New York,” said Brendan Lillis, senior associate at Phillips Lytle LLP who has clients developing apps in the sector.
“There certainly is a lot of pressure to expand access to sports gambling (here),” he said. “I think that’s the direction we see a lot of states heading right now.”
Spread of sports betting
As of late August, 12 states will have some avenue in which bettors can place action on a wide variety of sporting events.
Oregon is the latest. Betting opens there Aug. 27 at Chinook Winds Casino, the first sportsbook in a state that borders the West Coast.
Six other states currently have implementation plans.
Sports betting, at one time only legal in Nevada, is more widespread since a 2018 U.S. Supreme Court ruling overturned a federal ban.
States have spent revenue earned on infrastructure, transportation, health, human services, projects and other general needs.
The rule change by the state Gaming Commission restricted sports wagering to only the state’s four licensed casinos and those owned by Native American tribes.
Rivers and Tioga Downs sought licenses immediately and Maione said he anticipates sportsbooks will be operational at another casino – Resorts World Catskills in Monticello – around when the college football and National Football League seasons begin.
Also expected to enter that mix is Oneida Nation, which runs Turning Stone Casino in Verona.
Maione said the commission worked closely with Rivers and Tioga Downs to ensure that any initial hiccups were minimized.
Justin Moore, acting general manager at Rivers, said the commission’s assistance was tremendous.
“They really were our MVPs in getting open when we did,” he said. “To them, it was as important to open when we did as it was for us. … They made it a priority for themselves and for us.”
Rivers has seen an uptick in midweek business during the summer months but Moore said events at nearby Saratoga Race Course helped, too.
“That’s all around,” he said of the increase in customers. “That’s hotel, that’s food and beverage and gaming. … We fully expect the casino to experience a large volume (of customer traffic) as football season kicks into gear.”
|The sportsbook at Rivers Casino in Schenectady opened in July.|
Rivers executives began to discuss plans for a sportsbook in January when Cuomo added it to his budget, he said, and they had additional help from Rivers’ corporate parent, which recently opened sportsbooks in Philadelphia and Pittsburgh.
“We had that initial experience already (as a company),” Moore said. “The prep work involved in this was a weekly meeting with a timeline and list of different tasks that needed to be completed.”
Aspects that executives didn’t consider were how many customers would place bets at an automated kiosk that operates 24/7 or the popularity of wagers on baseball and tennis, he said.
“(People) really enjoy betting on baseball,” Moore said. “There’s a lot of games, it’s daily and it’s not as challenging to pick the winners as some other sports are.”
The majority of the professional sports leagues are available to customers, as are major college sports.
Off the board, however, are games that involve collegiate teams from anywhere in the state or neutral site games hosted in-state, such as college basketball’s annual Big East Conference Tournament at Madison Square Garden or NCAA March Madness tilts in host cities such as Albany and Buffalo.
The state imposed the same 10 percent tax rate on sports betting that’s in place on other games.
Due to the population, if betting becomes more readily available to consumers, experts anticipate New York could have the biggest betting market in annual gross gambling revenue.
Apps on which customers can place bets away from casinos are the next big frontier in the industry, Lillis said.
According to experts, apps are key in maximizing tax revenue because of their exposure off-site from casinos to the masses.
New York has not provided an allowance for apps as of yet and Lillis said it’s unknown how soon that could change due to nuances in state law.
Moore said that if apps are legalized in New York, Rivers Casino will be ready quickly on that end, too, as it can retool one the corporate parent uses in other states.
Despite being approximately 275 miles from Schenectady, if apps are legalized for use statewide, Western New Yorkers could place bets without driving anywhere.
The NFL may be watching what happens at Seneca Buffalo Creek more closely than any local bettors.
Most speculative sites for a new stadium for the Buffalo Bills are within walking distance of the downtown casino at the corner of Michigan and South Park avenues.
Until recent years, most pro sports leagues maintained a safe distance from the gambling industry – and the NFL, in some cases, more than others.
A stadium in Las Vegas that will house the Oakland Raiders franchise opens in 2020 and will drop the NFL right inside the sports betting mecca of North America.
Another casino in Pittsburgh where a sportsbook opened earlier this year is only a few hundred yards from Heinz Field, home of the Steelers.
For the first time in any city aside from Las Vegas, fans will be able to place bets before a city’s hometown pro team plays, walk to the stadium for the game and collect any winnings before they head home.
The mobile laws in Pennsylvania allow bettors to make wagers from their seat inside the stadium via their phones, as well.
“This is new territory for (the NFL) … It remains to be seen exactly what types of situations will need to be addressed,” said Helen “Nellie” Drew, a professor at University at Buffalo School of Law who oversees the Center for the Advancement of Sport.
The NFL and other leagues were long believed to avoid ties to gambling in an effort not to threaten the integrity of their sports, she said.
Some controversies through the years nonetheless did and the leagues only relented that stance, she surmised, because of increased interest among fans.
“That new reality is not something they elected; it was inflicted on them,” Drew said.
The NFL and other leagues, some of which already signed partnership deals with sportsbooks, must be diligent in compliance and other aspects of their operations as things progress, she said.