- Golden Nugget Online Gaming has secured online access to the New York market thanks to a deal with the Tioga Downs harness track.
- New York is expected to create a framework for online/mobile gaming within the next year.
- Earlier this week, Penn National announced a New York market access deal with Rivers Casino in Schenectady.
Although New York Governor Andrew Cuomo is primarily occupied with bumbling his way through the COVID-19 pandemic at the moment he’s already trying to set the table hoping to keep tax revenues coming into the state’s coffers. As part of this, he’s practically begged the state legislature to send him a bill to create a regulatory framework for mobile/online sports betting and casino gaming.
He’s thankfully backed away from the ‘single operator’ format that would have relegated the Empire State to sports betting irrelevance. That hasn’t stopped gaming industry players from pre-emptively ‘staking their claim’ to the potentially insanely lucrative New York market. Last week, Penn National announced a 20 year deal with Rivers Casino and Resort for market access. Their intent is obviously twofold–gain the market access itself and help shape the design of New York’s regulatory framework. If there are a variety of companies waiting in the wings even a bonehead like Governor Cuomo won’t be as likely to screw things up.
It didn’t take long for Penn National to get some company in the perinatal New York gaming market. Just a few days later, Golden Nugget Online Game (NASDAQ: GNOG) announced that they’d entered into a deal for ‘future online market access’ with the Tioga Downs Race Track. Currently, New York allows the state’s tribal and commercial casinos to offer sports betting and the assumption is that they’ll be juiced in to the online market. FanDuel operates the retail sportsbook at Tioga Downs but there’s every reason to think that New York will allow multiple online providers for each gaming licensee. As a result, Golden Nugget’s deal includes both sports betting and casino gaming for which Tioga Downs will receive a percentage of revenue subject to minimum royalty payments.
Golden Nugget Online has very quietly become a growing presence in the US market. They’ve got market access in 9 states–in addition to New York they’ve got access in New Jersey, Michigan, Pennsylvania, Illinois, West Virginia, Nevada, Mississippi, and Louisiana. It would be very surprising not to see them in Colorado before long. Here’s what the press release announcing the deal said about revenue potential in the New York market:
With close to 19.5 million residents, New York is the fourth most populous state in the US. Based on the latest revenue trends in New Jersey and Pennsylvania, GNOG believes that the New York online casino market could reach $2 billion Gross Gaming Revenue at maturity.
New York is similar to states like Illinois and Pennsylvania in that it’s really too big to screw up. Of course if there *is* a way to screw up sports betting in the Empire State you can be sure that Governor Cuomo will be the man to find it.
For now, however, both parties to the agreement are sounding an optimistic tone. Thomas Winter, President of Golden Nugget Online Gaming had this to say about New York and the partnership with Tioga Downs:
“We are very excited to sign this long-term partnership with Jeff Gural and Tioga Downs. New York is key to our growth strategy and we look forward to the state embracing online gaming. We will remain focused on securing new market access partners in more US states. With its iconic brand, superior product and award-winning operations, GNOG is uniquely positioned to take advantage of the exponential growth of online gaming in the US.”
Tioga Downs owner Jeffery Gural returned the love:
“Tioga Downs is excited to partner with one of the best performing online gaming operators in the US. GNOG has one of the most experienced online teams, a historied US casino brand and a proven track record in our neighboring state of New Jersey. I’m confident GNOG will bring an exciting product to my home state of New York and together we will generate excellent new revenue streams for GNOG, Tioga and the state of New York.”
Look for more ‘future market access deals’ for New York to drop in the coming few months. If there’s already a group of companies waiting in the wings to offer sports betting and casino gaming online in New York it makes it that much tougher for the state to create a framework that doesn’t accommodate them.
At the time of publication, James Murphy has a long position in GNOG.