State clears firm linked to Schenectady’s Rivers Casino to begin mobile sports betting

PETER R. BARBER/DAILY GAZETTE The gaming floor at Rivers Casino in Schenectady Friday, November 12, 2021.

PETER R. BARBER/DAILY GAZETTE The gaming floor at Rivers Casino in Schenectady Friday, November 12, 2021.

SCHENECTADY — Four recently licensed mobile sports wagering operators can begin operations in New York state as early as Saturday morning.

The state Gaming Commission announced Thursday that the four had satisfied all requirements to accept bets and have been approved to do so starting at 9 a.m. Jan. 8.

Among the four is Rush Street Interactive, which oversees the in-person sports betting operations at Rivers Casino & Resort Schenectady. RSI already operates online gaming in 11 other states.

RSI is an affiliate of Rush Street Gaming, operator of casinos under the Rivers name in Schenectady and three other cities. RSI and RSG had the same cofounder, have the same chairman and share an address in Chicago.

The connection may not have much practical benefit for Schenectady.

RSI had to place the computer servers it will use for New York mobile sports wagering at a licensed casino within the state, and of course it chose Rivers Schenectady. But there isn’t a workforce attached to the server farm, and none of the tax revenue generated by the millions of dollars churning through those servers will be shared with local municipalities — the state will keep it all.

The state also retains all of RSI’s $25 million one-time licensing fee.

To borrow a gambling term, New York state has gone all in on its tax on the newest form of legal gambling within its borders. 

The rate is 51% — apparently tied for the highest gambling tax in the nation, and far more than most other states, including New Jersey, where the rate is 13%.

The state has earmarked $6 million a year of the mobile sports wagering tax revenue for problem gambling treatment statewide and $5 million for sports programs statewide for underprivileged youth. 

Rivers Schenectady General Manager Rick Richards has said that the advent of mobile sports betting will likely drive up interest in Rivers’ sportsbook, the retail sports betting operation within the waterfront casino. 

That would generate some local impact: The tax on the sportsbook’s revenue is shared with the city and eight counties, and a few people have been hired for the sportsbook in anticipation of the increased patronage Richards expects. 

RSI has been growing rapidly since it went public in April 2020.

Full-year revenue for 2021 has not been tallied but is projected at $480 million to $500 million. This compares with $279 million in 2020 and $64 million in 2019. 

RSI did not post a profit in 2019 or 2020, but its net loss for the first nine months of 2021 was $33 million, down from $90 million in the same period of 2020.

RSI has mobile, online and retail operations in Pennsylvania, Illinois, New Jersey, Connecticut, Michigan, Indiana, Virginia, Colorado, Iowa, West Virginia and Arizona, but considers its newest market to be potentially its biggest.

CEO Richard Schwartz said Thursday in a news release: 

“The long-awaited launch of online and mobile sports betting in New York — the largest online sports betting market by population in the United States — is here, and just in time. With the college football championship game on Jan. 10 and NFL playoffs approaching, and the NBA and NHL seasons in full swing, in addition to countless other sports and betting options available for play, fans have endless entertainment at their fingertips at BetRivers.”

Mobile sports betting was legalized by New York in 2021 in an attempt to capture some of the money New Yorkers had been wagering through operators in other states — particularly New Jersey, which is a quick hop from the huge New York City market.

The Gaming Commission awarded licenses in early November to RSI and eight other operators.

RSI and three others — Caesars Sportsbook, DraftKings and FanDuel — have satisfied requirements and are cleared to begin.

Categories: Business, News, Schenectady County

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