Penn National Gaming (NASDAQ:PENN) announced yesterday it has inked a new partnership with a New York casino. The alliance with Rivers Casino & Resort, the DBA ("doing business as") name of Capital Region Gaming, will last for 20 years, assuming it clears regulatory and legislative hurdles, the press release says.
Digital gambling and online sports betting companies were facing a potential roadblock in gaining access to New York's huge, and thus probably lucrative, internet gambling market until very recently. Just last month, Gov. Andrew Cuomo reiterated his intention to operate a state digital sports betting monopoly, saying New York's online sportsbook legalization is "not a money-maker for private interests, it's just the means so that we [the state] can collect more tax revenue," Gambling News reported in January.
However, a limited free market model appears likely to replace this hardline position. Morgan Stanley analyst Thomas Allen reported in a research note today that inside sources say New York state will probably allow seven or 14 private companies to operate there. Allen remarks "notably Cuomo's camp had already been moving away from just a single operator" and says Morgan Stanley's analysts "aren't surprised that PENN received access in this context given we see it as 1 of 6 market leaders."
Jon Kaplowitz, a senior vice president at Penn National, says a "state the size of New York certainly warrants open competition and a free market approach." Penn, which has over a 13% market share in U.S. digital sports betting, says its expansion strategy generated $27.5 million in gambling handle during its first 10 days of Michigan operation and it hopes for similar success in New York.