B Global founder Brendan Bussmann pulled no punches today when assessing New York State Gov. Kathy Hochul’s latest foray into gaming policy. Bussmann characterized Hochul’s attempted entente cordiale with the Seneca Nation as a “hold my beer, I’m going to take this state to a new level of chaos” gambit.
Saying he stood corrected on previously more optimistic assessments of prospects for gambling expansion in the Empire State, Bussmann fumed, “Not only is the process for the downstate casinos in a perpetual delay, but now the governor’s office has tried to pull a fast one on everyone for a new casino in Rochester under the cover of darkness …
“[Hochul] decided to try to give [the Seneca] a new casino in Rochester as part of their new compact. Apparently, staff could not walk down the hall and dust off their two-year-old million-dollar-plus study completed on behalf of the New York state Gaming Commission that showed the market was already saturated.”
What this will do, Bussmann says, is prompt a legislative review of the gaming tax in the state, as the existing upstate casinos will undoubtedly petition for relief from the legislature, given the new competition. If matters currently stand as they are, the Seneca will pay 9.5 percent of gaming revenue in Year One and 19.5 percent in the remaining years of the proposed compact, less than their current impost of 25 percent.
“Apparently, the Seneca realize that the market is overtaxed, but then again, what is not in the state of New York that tries to kill the golden goose each time it does an expansion of gaming?” summarized the veteran analyst. “The Assembly has since adjourned without taking up the measure, but this issue is far from over.”
Bussmann characterized the process to select a New York City-area operator as “stalled,” remarking that it is “at a minimum a year away from selection of the three Willy Wonka golden tickets.” He still believes that MGM Empire City and Resorts World New York will be juiced in by dint of prior investments. Bussmann also noted the new wrinkle created by Larry Silverstein’s proposed Manhattan joint venture with Park Casino.
Elsewhere in the nation, Bussmann characterized the political scene as dominated by “further grabs at revenues with erroneous tax rates as we recently saw in Ohio” and “further restrictions on operations and advertising without any proof.” He didn’t elaborate.
Sports betting filled most of the remainder of Bussmann’s screed. Looking at North Carolina, where Gov. Roy Cooper recently signed sports betting into law, the analyst said the 12 potential operators would be taxed at 18 percent, plus $1 million upfront. He predicted the state would launch “as quickly as it can,” but probably not soon enough to catch the first half of the NFL season.
He also forecast a slow start for sports wagering in Nebraska, as only one retail sportsbook was open in time for the College World Series (won yesterday by Louisiana State University). “Nebraska has one of if not the most restrictive sports-betting catalogs in the country. Basically, if it isn’t centered in the United States, then do not plan to place a bet on it,” Bussmann reported.
Also, Nebraskan punters face considerable logistical challenges. The forthcoming sportsbook in Omaha would not be as accessible as driving to Iowa and placing a wager, Bussmann opined. Citing data from GeoComply, he said the number of attempted mobile wagers in the Cornhusker State was on par with those in North Carolina, but that any further expansion into mobile wagering would likely not make it through either the legislature or the governor’s office.
It appears to be expansion of gambling by ballot initiative or nothing. “Let’s just hope,” Bussmann added, “the Unicameral [legislature] does not learn that one licensee has already been shopping those mobile licenses that do not exist today.”
Vermont “made a whimper when it legalized sports betting,” Bussmann wrote, but it “closes out the northeast corridor” or it will, once Maine goes live. The bill signed by the governor allows for as many as six licenses, taxed at a minimum of 20 percent.
However, the analyst reported, the request for proposals being circulated is modeled on New Hampshire’s sports betting regime, which has a 51 percent tax rate and a monopoly, held by DraftKings. “Let’s hope they seek wiser council than New York did, as New Hampshire is not a model for any state,” Bussmann counseled. “To the same extent, let’s also see if they can move quicker.”
Like Vermont, Rhode Island, which quietly legalized online casinos last week, was cited as “a model of what not to do.” It is set up as a Bally’s Corp./International Game Technology monopoly, taxed at 61 percent. “This will complement the existing sports betting product, but will likely not move the needle much in revenue, as it is a small state,” Bussmann groused, noting that the real impact would be whether it motivates other states to venture into igaming as part of a “border war.”
Quick out of the blocks is Kentucky, where sports betting could launch before the Dec. 28 set date. Initial regulations will be discussed next month in accordance with the state’s goal of starting betting by NFL season. Bussmann cautions, “It is possible to get this market launched in time for the first kickoff, but they will have to rely heavily on the experience from some previous states on how to set the parameter right.”
In “forgotten” Puerto Rico, sports betting was characterized as being on a slow boat, BetMGM having launched in early June, while Caesars Entertainment is “continually playing a waiting game.” Bussmann reminded readers that the territory legalized sports betting four years ago.
“Four governors and three executive directors later, the dream of mobile sports betting has finally come to fruition in a jurisdiction that still provides you a license for the first ten years for free if you used to be involved with cockfighting,” Bussmann wrote with evident distaste. “However, its biggest challenge is not the in-person registration requirement, but bureaucracy that can’t get out of its own way.”
Finally, Kansas has legalized historical horse racing machines (HHR). The initial ones go live in Sedgwick County next month. Phil Ruffin and Boyd Gaming are the remaining contenders for the last pair of licenses.
In Boyd’s case, it’s an instance of preferring to switch than fight, having failed in a challenge to HHR under the Kansas Expanded Lottery Act of 2007. Reports Bussmann, “Hearings will take place in mid-July in Wichita to see who will benefit from this expansion of gaming that may finally return life to the racetracks that were shuttered based off of the structure founded in 2007 when KELA was passed.”
