New York’s mobile sports betting law pledged cash for youth sports. Where did the money go?
The Rochester Hispanic Youth Baseball League’s home fields at Baden Park are diamonds in the rough.
The neighborhood surrounding the ballfields at Hudson Avenue and Upper Falls Boulevard is beset by violence and poverty. A shootout in a nearby parking lot a few days before the baseball season opened in June left a teenage girl dead. Before games, volunteers comb the outfield and bleachers for liquor bottles, lighters, and worse.
“Last year, we had a little girl that got stuck by a needle on our fields,” said Santos Cruz, the league president.
The league, which serves about 200 children on a shoestring budget, is precisely the sort of organization that New York state legislators had in mind when they carved out funding for underserved youth sports nonprofits in the state’s online sports betting law.
When the first round of that funding was disbursed last year, though, the league was overlooked. So were all but one eligible youth sports organization in Monroe County.
Cruz was preparing the fields for opening day when he learned about the funding for youth sports organizations like his. He had questions.
Who chooses which organizations get money? Does the state give the money to counties to distribute? Did Monroe County put the money out to bid? Is there an application process?
“We could use that money just to help improve our parks,” Cruz said. “Right now, I’m begging for dirt so I can fill the base paths. That’s all I’m asking for. Dirt.”
His confusion was understandable.
How gambling proceeds are to be steered to youth sports organizations in New York has received scant attention. The details are buried in budget books, regulations, and a patchwork of processes that vary county by county.
Representatives of several nonprofit youth sports organizations in Monroe County that qualify for funding said in interviews conducted early this summer that they knew nothing about the law or that money was available to their programs.
“I had no idea about this,” said Deon Rodgers, the president of River Flow Soccer Club, an all-volunteer nonprofit that serves young people, many of them immigrants and impoverished.
“We would love to apply,” Rodgers said. “Every year we’re in the red and never have we turned a kid away. We are a bare bones budget, sometimes pulling money out of our own pockets to pay for kids.”
A PIONEERING EFFORT
States have sold gambling as a savior for cash-starved public schools since they began legalizing lotteries some 60 years ago. The New York Lottery touted the catchphrase, “Raising billions to educate millions.”
For almost as long, though, there have been complaints that not enough lottery proceeds go toward education.
The revenue stream for youth sports organizations derived from gambling presents a new follow-the-money challenge for youth sports advocates, including legislators who championed the law.
“To be honest, I’ve been having conversations about whether we can try to do more to ensure that the money goes to what I personally had intended in passing this legislation,” said Monica Wallace, a Democratic Assembly member from Erie County who was instrumental in ensuring funding for youth sports from the mobile sports wagering law.
“This is for those nonprofits that really kind of operate on a shoestring and that help some of the most underserved people in communities that wouldn’t normally have access” to financing, she said.
New York was slower than many other states to embrace mobile sports betting. But state legislators were pioneers when they authorized it in 2021 on the condition that some of the state tax imposed on wagers be used to fund sports programs for underserved youths.
Specifically, they mandated 1% of taxes in the first fiscal year of gambling, and $5 million a year thereafter.
Little did they know that New York would emerge as the biggest online bookmaking market in the nation when mobile sports gambling opened in January 2022.
By the time that fiscal year closed at the end of March, New Yorkers had placed $4.7 billion in wagers, according to the New York State Gaming Commission, putting the state ahead of New Jersey, which had held the top spot in mobile sports betting.
That translated to $160 million in tax revenue for New York that fiscal year, and $1.6 million for youth sports.
Some legislators have since lamented not fixing the annual allotment for youth sports at 1% of the state’s take in perpetuity. At the rate New Yorkers are placing bets, that could have meant more than $7 million for youth sports annually rather than the $5 million that legislators agreed upon.
“We really just didn’t know how much sports betting revenue would yield,” Wallace said. “So the $5 million was to give it a hard number going forward. . . . Now that we see how much it’s yielding, I would love to increase that.”
Last year, New Yorkers placed $16.3 billion in wagers, and are on pace to lay down more than $17 billion this year.
Legislators in Ohio expanded on New York’s lead when they passed their version of a mobile sports betting law last year. They mandated that half of all tax revenues be set aside to support interscholastic athletics and extracurricular activities. Recently, though, that provision was stripped from measure and the money was redirected to the state Education Department.
FOLLOWING THE MONEY
In New York, online sports gambling proceeds reserved for youth sports are directed to a fund overseen by the state Office of Children and Family Services. The agency divvies up allotments for every county based on population, and alerts county youth bureaus when that funding is available.
State regulations outline the criteria for eligible youth sports organizations. Recipients must be nonprofits, and priority must be given to those serving “historically under-resourced communities,” “neighborhoods that experience higher rates of crime and violence and poorer performing schools,” and “people of color or providers of adaptive sports for youth with physical disabilities.”
But the regulations do not offer guidance on how counties should identify or solicit those organizations. The result is a patchwork of policies.
Some counties have advertised their cut in news releases and announcements on their websites. Other counties have implemented a competitive bidding process. In some cases, county legislatures have gotten involved.
“It’s all locally driven by the county at the discretion of the youth bureau under the oversight of the county executive,” explained Madeline Hehir, the director of youth development at the Office of Children and Family Services. “Following local and state procurement requirements, municipal youth bureaus can support a range of local programs.”
Monroe County put its first allotment, which totaled $32,725, out to bid. The county issued a request for proposals inviting youth sports organizations to “work in collaboration” with the Youth Bureau.
Only one organization responded — Western New York Pop Warner — and it received the county’s entire share.
The organization fields several youth football and cheerleading teams across the region that are composed mostly of youngsters who live in households below the poverty line.
Horace Davis, the longtime president of Western New York Pop Warner, said he could not recall how he learned of the county’s bid, which went out in August 2022.
He said he suspected it was emailed to him because he regularly inquires with local elected officials about financial support. He did not respond to subsequent inquiries about the source of the email.
Davis added, though, that the money was sorely needed, and that it would go toward replacing helmets and supplementing the cost of dance uniforms and registration fees, which are between $100 and $150.
“We lose a lot of kids who just can’t afford an extra $50 or $65 for a dance show,” Davis said.
TRANSPARENCY AND ACCESS
That Western New York Pop Warner qualifies for funding is not in question.
But that it was the only organization to apply for funding has prompted questions from other eligible youth sports groups about transparency and access.
Representatives from every one of the youth sports organizations WXXI News interviewed said they knew nothing of the bid.
Greg Hopkins, who runs Changing the Community, a nonprofit that fields football teams for at-risk youths, was shocked to learn of the bid from a reporter only this summer.
“If I would have known, we would have definitely put in a proposal to receive some of that funding,” Hopkins said.
He spoke from a warehouse on Lincoln Avenue in Rochester, where volunteer coaches put 40 teenagers through running and passing drills on threadbare turf that peeled off the floor in places with every turn and pivot.
Most of the players were Black and brown, and Hopkins said many of them lived in public housing. He said some cannot afford to pay their registration fees, but that his organization finds a place for them and fundraises for their share.
“I would actually like to see somebody come out and say there’s money out there from gambling,” he said. “Nobody has spoke about the legislation, and because of that I believe this is going to continue to be under the radar until something is done about it.”
Tony Jordan, the director of the county Youth Bureau, acknowledged in an interview that word about the availability of funding may not have reached as many qualified youth sports organizations as possible, but said that he is working to change that.
He attributed the potential lack of communication to the absence of leadership in the Youth Bureau when the request for proposals was issued. Jordan took the helm as executive director in January, about six months after his predecessor had resigned.
“I think not having an executive director at the Youth Bureau at the time, and having a bit of transition, certainly when you have someone in place that’s working in the community they can help alert the community a little better,” Jordan said.
Around the time that Jordan began leading the Youth Bureau, the state alerted counties to another round of funding. This time, Monroe County’s slice of the pie was $137,000.
But, Jordan said, the county missed a window to issue another request for proposals inviting youth sports organizations to apply. To publicize the availability of the funding, Jordan said he has been contacting and meeting with qualified organizations.
He anticipated that six or seven organizations would be selected by the Youth Bureau to get a piece of the allotment.
“We’ll try to help as many as we can,” he said.
The state is expected to issue another allotment to counties this fall, and then again on an annual basis. Monroe County is projected to receive about $178,000 a year going forward, the largest amount it can get under the law.
Jordan said the county will once again issue a request for proposals inviting youth sports organizations to apply. He said the Youth Bureau will also contact organizations to alert them to the invitation.
“We’re going to re-issue that request for proposals and we’ll do a really good job of getting the word out,” Jordan said. “I’m confident that we will have a better response to it.”
Karen Iglesia, who runs Primetime585, a nonprofit that hosts a free weeklong basketball camp among other initiatives, applauded the county’s effort.
Like other representatives of youth sports organizations interviewed early in the summer, she was unaware of the mobile sports gambling funding. But she and others have since said that county officials have reached out to tell them more.
“Organizations have to have equal access to that fund,” Iglesia said. “One or two organizations, just because they might know someone or are friends with someone, cannot be the ones that get all those funds.
“There is a lot of organizations out here doing great things,” she went on. “Not just one or two.”