NYS lawmakers consider allowing 'prop bets' for fantasy sports leagues

ALBANY — New Yorkers playing fantasy sports on gambling platforms may soon be able to place side bets on novel wagers such as how many points Knicks guard Jalen Brunson will score in a quarter, whether Yankees slugger Aaron Judge will hit a home run in his next at-bat, how long the national anthem will be sung, and what color Gatorade will be used to drench a winning NFL coach.

A legislative proposal would legalize these increasingly popular “prop bets,” but only for New Yorkers playing fantasy sports on gambling platforms such as FanDuel, a niche market in sports gambling. 

These proposition bets can spice up a blowout game or add to the excitement of a close game for as little as $5 a wager, according to the bill's sponsors and academic researchers. Parlays or multiple-prop bets can yield bigger payoffs.

But there is a danger, too. The allure of these small, quick bets can add up fast, resulting in many more bets each game than a gambler may have planned, or is able to afford, gambling addiction experts say.

“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 said in an advisory before the Super Bowl in February. 

Researchers also note there is an “integrity-of-the-game” issue, in which an athlete could intentionally underperform or fake injuries to cash in on prop bets. In April, the NBA banned Toronto Raptors player Jontay Porter for life in part because he played only three minutes of a game March 20, complaining that he was ill. His limited performance played into an $80,000 prop bet, according to the NBA’s announcement.

New York’s proposal would apply only to “peer-to-peer” prop bets, which means fantasy sports players can only engage in prop bets with players in the same league during the same game.

Passage, however, could open the door to prop bets in overall sports betting where the biggest platforms are pushing states to approve more prop betting, said Stephen Shapiro, a professor of sport and entertainment management at the University of South Carolina.

“If it’s legalized in some way, I think the platforms are going to try to leverage that the best they can, because of the opportunity,” Shapiro told Newsday. “That’s where the industry is going.”

Many states allow some prop bets

Many states that legalized sports betting allow at least some prop bets. Most states, including New York, ban prop bets on college sports, citing the potential social media assaults on young athletes by losing bettors. Other states ban prop bets on games played within their state in an attempt to ward off manipulation of outcomes.

But the trend toward more prop betting is clear, boosted in part by the widely reported betting during the Super Bowl on how many times TV coverage would cut away to Taylor Swift watching the game, if the pop singer would eat a hot dog, or if she would agree to marry her boyfriend, Kansas City tight end Travis Kelce. 

“People still wager a lot on the spread, but they also place a lot of proposition bets for things like first player to score, first sack, etc.,” said Brad Humphreys, an economics professor at West Virginia University who researches gambling. “It is also amazing that a lot of people like to bet on the coin toss, which is completely random.”

In fantasy sports, participants assemble their own rosters of players from various teams, pay a fee and can win prizes when the athletes score or outperform other players in their positions during their real-life games.

In fantasy football, baseball, basketball, soccer, golf and some other sports, the participant’s team wins or loses against another participant’s team by adding up points for each player on their roster. Prop bets would add far more wagering and millions of dollars in added revenue to the state.

In New York, the legislation to allow it for fantasy sports has powerful sponsors aimed at increasing the state’s revenue.

“Fantasy sports was only getting about $3 million to $4 million a year for the state,” said Sen. Joseph Addabbo (D-Queens), chairman of the Senate Racing, Gaming and Wagering Committee. “Are you kidding me? Why are we not maximizing fantasy sports like other states?

“Instead of losing this money to other states, or to illegal markets, let’s get them to stay in the state and make the product better and expand it,” Addabbo told Newsday. “It allows us to create more revenue for education … I think it will benefit all New Yorkers.”

Legal gambling age would be raised

Addabbo and the bill’s co-sponsor, Assemb. Gary Pretlow (D-Mount Vernon), chairman of the Assembly Racing and Wagering Committee, said they have confidence in the state Office of Addiction Services and Support and its increased funding under the state budget to deal with any problem gambling that might result from prop betting. Their bill also would raise the legal age to engage in fantasy sports under state gambling law to 21 from 18.

“I like prop betting,” Pretlow said, adding that gambling platforms nationwide “love it.”

Pretlow told Newsday the state Gaming Commission has concerns about prop bets. He said a compromise may limit prop bets to “season-long” wagers, such as who will be named a league’s most valuable player for the year, rather than in-game bets.

The state Gaming Commission won’t comment on pending legislation, commission spokesman Brad Maione said.

The idea has quietly moved from a pitch by major gambling platforms to the state Gaming Commission last fall to legislation that could be adopted before the session’s scheduled end on June 6.

The proposal has gained little attention because legally it isn’t a major expansion of gambling, which would have prompted public hearings by legislators. Instead, prop bets would be exclusively part of fantasy sports gaming which, under state law, isn’t a game of chance. The law sees fantasy sports play as relying less on pure luck and more on the expertise of the players.

That view is questioned by researchers.

“Most states consider prop betting on players to be in the same vein as traditional gambling on teams,” said Shapiro, the University of South Carolina researcher.

But prop bets can be even more enticing for gambling platforms and gamblers.

“From a promotional perspective, a $5 bet is not a big barrier to get new bettors to give it a shot,” Shapiro said. “From a gambling addiction perspective … the frequency and the speed at which you are able to do it presents potential risk.

“My guess would be that, over time, these issues will be brought up as we see more and more individuals gamble,” Shapiro added. “But right now, we’re in a growth stage.”

By Michael Gormley

michael.gormley@newsday.com@GormleyAlbany

Michael Gormley has worked for Newsday since 2013, covering state government, politics and issues. He has covered Albany since 2001.