New York lawmakers propose legalizing prop bets for fantasy sports to boost revenue

New York legislators are considering a proposal to legalize proposition bets (prop bets) for fantasy sports, allowing residents to place bets on specific events such as the number of points a player will score in a quarter or whether a player will hit a home run in his next at-bat.

The proposed legislation is designed to only allow these bets for New Yorkers playing fantasy sports on licensed gambling platforms. These prop bets can add excitement to both one-sided and closely contested games, with wagers starting as low as $5.

However, gambling addiction experts warn that the cumulative effect of these small, frequent bets can quickly lead to significant financial risk. "While prop bets can appear to be harmless fun for people, the potential for problem gambling still exists," the Council on Compulsive Gambling of New Jersey noted in an advisory prior to the Super Bowl.

Assembly Racing and Wagering Committee Chairman Gary Pretlow

The bill, co-sponsored by Assembly Racing and Wagering Committee Chairman Gary Pretlow, also seeks to raise the minimum age for participating in fantasy sports from 18 to 21, aligning it with the age requirement for sports betting in New York. This age adjustment aims to protect younger individuals from potential gambling harms.

Senator Joseph Addabbo, chair of the Senate Racing, Gaming, and Wagering Committee, is also backing the proposal, emphasizing the potential for increased tax revenue. "Fantasy sports was only getting about $3 million to $4 million a year for the state," Addabbo told Newsday. "Are you kidding me? Why are we not maximizing fantasy sports like other states?"

Senator Joseph Addabbo, chair of the Senate Racing, Gaming, and Wagering Committee

The legislation includes measures to mitigate potential abuse and scandal. For example, it limits prop betting to wagers between individuals within the same fantasy league during the same game.

Additionally, Pretlow suggested that one possible compromise to address the concerns of the New York Gaming Commission could be to restrict prop bets to season-long wagers, such as predicting the winner of the Cy Young award, rather than in-game bets.

The bill aims to prevent revenue from flowing out of state or to illegal operators, bolstering funding for education and other public projects. Prop bets would add far more wagering, and millions of dollars in added revenue to the state, backers say.

Despite the potential benefits, the proposal has not garnered significant attention, partly because fantasy sports are classified as games of skill in New York, thus not falling under the same scrutiny as gambling expansions. However, this classification means that the proposal may not require extensive legislative hearings typically associated with gambling expansion bills.