Self-regulation is not going to cut it for the New York State Gaming Commission (NYSGC).
- New York’s gaming regulator is re-examining sportsbook player props amid recent integrity scandals.
- Chair Brian O’Dwyer suggested that leagues’ self-imposed restrictions are insufficient and said all approved leagues are welcome to recommend further limits.
- The NYSGC is also scrutinizing federally regulated prediction markets, backing cease-and-desist actions, condemning concerning political contracts, and considering whether participation in such markets could render operators unfit for New York licenses.
The chairman of the commission made it clear during a meeting Tuesday that in light of recent scandals, and despite corrective action by professional sports leagues, the regulator will do its own due diligence and make its own decisions about what should be on the wagering menu at state sportsbooks.
“In New York, that discretion lies solely with us,” NYSGC chair Brian O’Dwyer said after noting MLB’s recently announced pitch prop restrictions. “While limiting exposure is a good step, it may not be enough. It is not enough. If we believe any wager is susceptible to manipulation, we will eliminate it, not restrict its offering.”
The chair said commission staff have already been instructed to re-examine game-specific player props and same-game player prop parlays. Those staffers will then return to commissioners with their findings.
In other words, additional restrictions on prop bets could be coming for New York sportsbooks and New York sports bettors.
As an example, O'Dwyer noted the NFL’s recent memo on its prop betting efforts, including props to which it objects and has sought to prohibit at sportsbooks. The chair said the initial review by NYSGC staff found only one of the 104 NFL props allowed by the regulator “could be remotely thought” to meet the league’s criteria for problematic.
No substitutions
At any rate, the comments from the chief watchdog of New York sports betting suggest that any league trying to stave off regulatory responses to recent scandals with their own fixes may not be entirely successful.
In states such as New York, New Jersey, and Virginia, lawmakers and regulators have suggested they could still impose their own, additional restrictions on what people can bet.
O’Dwyer said the problem may be that prop betting is inherently more susceptible to manipulation than betting on a game outcome or a team as a whole.
Props could, he added, also be more attractive to underage and problem gamblers, something the commission would consider.
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O’Dwyer’s comments Tuesday about sports betting markets were in some ways unsurprising.
The recent integrity scandals that have rocked Major League Baseball and the National Basketball Association have leagues, lawmakers, and regulators looking at ways to try to prevent future incidents.
The New York commission chairman also issued recent statements that reminded leagues they could request restrictions on certain wagers under New York law and regulations.
“In New York State, the Gaming Commission - not sports wagering operators - controls the wagering menu (including proposition wagers), and limits the sports and leagues accepted for sports wagering,” O’Dwyer said in one such statement on Nov. 10. “Functionally, this gives those leagues substantial input regarding the wagering menu.”
The chair added Tuesday that the commission will soon send a letter to each of the more than 70 leagues on which the regulator allows wagers to be placed. The letter, he said, will invite them to cooperate with the commission by suggesting any further betting restrictions they’d like to see.
“That such activity allegedly occurred is not a surprise,” O’Dwyer said. “There are and always will be individuals who try and manipulate the system. Our job at the commission is to regulate wagering to drastically reduce their ability to do so.”
With all that said, the chair reminded the public that mobile sports wagering requires bettors to create accounts and leave behind records and data. Legal gambling, even with “all its inherent problems,” allows the state to identify and deal with those who try to abuse the system.
Forecast calls for C&Ds
The chair then turned to the matter of prediction markets, another area of concern for the NYSGC.
Operators of those markets, regulated by the federal Commodity Futures Trading Commission, can “self-certify” event contracts that users can then buy and sell, making de facto bets in connection with sports, politics, and a variety of other things.
O’Dwyer noted the regulator sent Kalshi a cease-and-desist letter in October, which alleged the federally regulated prediction market is operating an unlicensed mobile sports wagering platform in New York.
Kalshi responded with a lawsuit seeking an injunction and restraining order against the commission.
O’Dwyer said he supported the cease-and-desist effort and suggested it was likely the commission would send more C&Ds as it tries to curb the type of wagering offered by prediction markets in New York.
I'm not laughing
In addition to de facto sports betting, though, commissioners also sounded troubled by other betting markets offered by prediction markets.
O’Dwyer said the “urgency” for action was recently underlined by prediction markets facilitating wagering on whether the incoming mayor of New York, Zohran Mamdani, would be deported this year.
“If this is a joke, it’s not funny,” O’Dwyer said, calling it “racist” and something that singled out an elected official for “special, unwanted attention.”
“Such ad hominem wagers can and do often lead to far worse consequences to our elected officials and our society as a whole,” he said. “This commission would never allow such a wager.”
O’Dwyer also took a swipe at prediction markets, alleging they have no provisions to deal with underage or problem gambling.
However, the chair then noted the commission has been made aware that some of its licensees have indicated their plans to participate in prediction markets. (DraftKings and FanDuel would be among them.)
This has prompted more rethinking by the gaming commission.
“Given the dangers of prediction markets to both the state of New York and its citizens, it is now appropriate that this commission examine whether the participation of any of our present licensees (in) so-called prediction markets makes them unfit to maintain their gaming license in New York,” O’Dwyer said.
The commission’s general counsel and staff will examine this and make recommendations to the commission in the near future, the chair added.
