Legislation for recreational marijuana, online sports betting proposed in New York state

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Gov. Cuomo cites measures as possible revenue sources as state manages $15B deficit

ALBANY, N.Y. (WROC) — Gov. Andrew Cuomo said New York state is facing a $15 billion deficit during Wednesday’s coronavirus briefing, and he said the state is exploring two possible options for helping close the budget gap.

The governor expressed confidence in legalized online sports betting, and legalizing recreational marijuana, as revenue sources for the state.

For sports betting, the governor said New York wanted to set up a system similar to the lottery, where the state gets a larger share of the revenue. He said sports betting models approved in other states let private casinos regulate the gaming, an avenue he’s not interested in for New York.

“We want to do sports betting the way the state runs the lottery, where the state gets the revenue,” Gov. Cuomo said. “I’m not here to make casinos a lot of money I’m here to raise money for the state.’

For recreational marijuana, the governor says it’s an agenda item that he’s been pushing for the past few years, but he said he believes the circumstances now present a unique opportunity to get the measure passed in the legislature.

MORE | What legalizing marijuana in New York could mean for local business, communities

“For recreational marijuana, I think this should have been passed years ago,” Gov. Cuomo said. “I think this should have been passed years ago, I think too many people have been imprisoned and incarcerated and punished — and too many of those people are Black, Latino and poor. I’ve supported it for years and I’ve tried to pass it, but this is the year we need the funding and a lot of New Yorkers are struggling and I think this is the year to give us the momentum to get it over the goal line.”

While acknowledging these two revenue sources wouldn’t be enough to close the budget gap in the short term, the governor said he was optimistic that the new Democratic-led Senate would be more willing to work with the states on funding than the previous iteration of Congress.

Sports betting

According to the governor’s office, Gov. Cuomo announced legislation Wednesday to authorize mobile sports wagering as part of the 2021 State of the State. Under Gov. Cuomo’s proposal, the New York State Gaming Commission will issue a request for proposals to select and license a sports operator or platform to offer mobile sports wagering in New York. This operator or platform must have a partnership with one of the existing licensed commercial casinos. The Commission will also require any entity operating mobile wagering apps include safeguards against abuses and addiction.

“At a time when New York faces a historic budget deficit due to the COVID-19 pandemic, the current online sports wagering structure incentivizes a large segment of New York residents to travel out of state to make online sports wagers or continue to patronize black markets,” Gov. Cuomo said in a statement. “New York has the potential to be the largest sports wagering market in the United States, and by legalizing online sports betting we aim to keep millions of dollars in revenue here at home, which will only strengthen our ability to rebuild from the COVID-19 crisis.” 

Officials from the governor’s office said Wednesday: “The sports gambling market is evolving rapidly. In 2018, the U.S. Supreme Court in Murphy v. NCAA overturned a federal law prohibiting most states from authorizing sports wagering. Sports wagering is now legal online in 14 states, including the bordering states of New Jersey and Pennsylvania, while it is only legal in New York at the four Upstate commercial gaming facilities and Native American gaming facilities.  An industry study found that nearly 20 percent of New Jersey’s sports wagering revenue comes from New York residents, costing the State millions of dollars in lost tax revenue.”

Marijuana

In addition to online sports betting, the governor announced a proposal to legalize and create a “comprehensive system to oversee and regulate cannabis in New York” as part of the 2021 State of the State. Under the proposal, a new Office of Cannabis Management would be created to oversee the new adult-use program, as well as the state’s existing medical and cannabinoid hemp programs. Additionally, an equitable structure for the adult-use market will be created by offering licensing opportunities and assistance to entrepreneurs in communities of color who have been disproportionately impacted by the war on drugs.

Once fully implemented, legalization is expected to generate more than $300 million in tax revenue, officials from the governor’s office said Wednesday.

“Despite the many challenges New York has faced amidst the COVID-19 pandemic, it has also created a number of opportunities to correct longstanding wrongs and build New York back better than ever before,” Gov. Cuomo said Wednesday. “Not only will legalizing and regulating the adult-use cannabis market provide the opportunity to generate much-needed revenue, but it also allows us to directly support the individuals and communities that have been most harmed by decades of cannabis prohibition.”

According to the governor’s office:

The governor’s proposal builds on years of work to understand and decriminalize cannabis for adult use. In 2018, the Department of Health, under Gov. Cuomo’s direction, conducted a multi-agency study which concluded that the positive impacts of legalizing adult-use cannabis far outweighed the negatives. It also found that decades of cannabis prohibition have failed to achieve public health and safety goals and have led to unjust arrests and convictions particularly in communities of color.

In 2019, Gov. Cuomo signed legislation to decriminalize the penalties for unlawful possession of marijuana. The legislation also put forth a process to expunge records for certain marijuana convictions. Later that year, the governor spearheaded a multi-state summit to discuss paths towards legalization of adult-use cannabis that would ensure public health and safety and coordinate programs regionally to minimize the cross-border movement of cannabis products.

Building on that important work, the proposal reflects national standards and emerging best practices to promote responsible use, limiting the sale of cannabis products to adults 21 and over and establishing stringent quality and safety controls including strict regulation of the packaging, labeling, advertising, and testing of all cannabis products. Cannabis regulation also offers the opportunity to invest in research and direct resources to communities that have been most impacted by cannabis prohibition.”

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