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New York Online Casino Legalization Plans in 2024

Quick Intro

As we step into the new year, New York State Senator Joseph P. Addabbo Jr. is poised to unveil novel plans for the legalization of online casinos in the state. In a recent discussion, Addabbo outlined his vision for an online casino bill that aims to capitalize on the thriving mobile sports betting market in New York.

Reflecting on the past, Addabbo highlighted the launch of online sportsbooks in New York on January 8, 2022. The revenue data from December 2023 is particularly telling, with nine online gambling operators in New York amassing a remarkable $188.3 million in gross gaming revenue (GGR). This figure not only cements New York’s leading position in mobile sports betting but also nudges it closer to Pennsylvania, the top earner in online casino revenue nationally, with a reported $191.9 million in GGR in November 2023.

Addabbo, representing Ozone Park, is optimistic that online casino gaming could potentially surpass the revenue from New York’s online sportsbooks. According to expert analyses he’s received, the New York online casino market could feasibly generate upwards of $1 billion annually. The upcoming bill, Addabbo explained, will seek to broaden the playing field by offering more than 20 operator licenses, a significant increase from the current number of legal sportsbooks.

This increase in the number of operators, Addabbo believes, will enhance the gaming experience for New Yorkers, adhering to his philosophy that a greater variety of options leads to a superior product.

In addition to expanding online casino gaming, the proposed bill will lay down the framework for an online lottery system. This would mark a departure from the current practice where New York Lottery participants must either visit retail outlets or rely on ticket couriers.

New York Online Casino Legalization Plans

Addabbo shared his intention to propose a bill stipulating a 30.5% tax rate for online casino operators, alongside a $2 million licensing fee. The bill will also pave the way for three “untethered” operators, not affiliated with land-based casinos, to acquire licenses at a cost exceeding $2 million, though the exact amount is yet to be determined.

The legislator acknowledged that these plans could evolve as dialogues progress with various stakeholders, including fellow lawmakers, retail casino union representatives, Governor Kathleen C. Hochul, and others. For now, the envisaged iGaming tax rate stands significantly lower than the 51% levied on New York sportsbook operators, contrasting with the tiered tax structures for online gambling in other states, like Pennsylvania’s 54% tax on online slots.

NY Online Gambling Legalization

NY Online Gambling Legalization

Alleviating Cannibalization Concerns

To address potential concerns about online gaming cannibalizing land-based casino revenues, Addabbo, along with Assembly counterpart J. Gary Pretlow, is formulating bills to earmark $25 million for training retail casino workers potentially impacted by this shift. This initiative comes in response to previous opposition from the New York Hotel and Gaming Trades Council, the union representing these workers.

Addabbo underscored the importance of considering the workers’ perspectives in the legalization process. He believes that the advent of online gaming will complement rather than compete with traditional casinos, ultimately boosting revenues for land-based establishments.

Moreover, Addabbo anticipates a positive reception from unions once an online casino live dealer studio is established in New York, bringing new members into their fold. This integration, he argues, signifies a harmonious coexistence between online and brick-and-mortar casino gaming sectors.

Commitment to Combating Problem Gambling

Senator Joseph P. Addabbo Jr. has emphasized that the forthcoming online casino bill will significantly bolster funding for problem gambling initiatives. The proposal earmarks $11 million for tackling gambling addiction, nearly doubling the $6 million currently allocated by the state’s online sportsbooks. This increased funding underscores New York State’s commitment to addressing this critical issue. Additionally, these funds will support K-12 public education in the state.

Addabbo highlighted the advantages of legal gambling platforms in aiding the fight against addiction. With these regulated sites, problematic betting behaviors are more easily identified, allowing for timely intervention and support for those in need.

In his efforts to promote responsible gaming, Addabbo hosted a free webinar during Responsible Gaming Education Month in September. A representative from the New York Council on Problem Gambling (NYCPG) shared a personal journey of addiction and recovery, illustrating the importance of these resources. Looking ahead, Addabbo is considering hosting another informative session in March, coinciding with Problem Gambling Awareness Month.

For New Yorkers seeking assistance, resources are readily available on: NYProblemGamblingHelp.org, including links to NYCPG programs, the New York State Office of Addiction Services and Supports (OASAS), and the New York State Problem Gambling Resource Centers (PGRCs). Additionally, sportsbooks guide bettors to New York State’s HOPEline for support.

The Legislative Journey of the iGaming Bill

The upcoming budget vote in April by the New York State Legislature for Fiscal Year 2025 presents a pivotal opportunity for the passage of critical bills, including Addabbo’s online casino legislation. The process starts with Governor Kathleen Hochul’s role in shaping the budget.

Fiscal Year 2025 Executive Budget

Governor Hochul is set to release the Executive Budget for Fiscal Year 2025 soon. In line with previous communications from Blake G. Washington, the Director of the Budget of the New York State Division of the Budget (NYSDB), this budget is expected to be conservative. Washington’s directive to state commissioners emphasized Governor Hochul’s commitment to delivering essential services while maintaining fiscal responsibility. He advised that budget requests for FY 2025 should align with the previous fiscal year’s enacted budget, excluding one-off investments, which totaled $229 billion.

Despite these austere measures, Addabbo revealed that New York faces a $4.3 billion deficit, a significant improvement over the earlier projected $9.1 billion shortfall but still a notable gap. With Hochul and Addabbo both opposing tax increases, the challenge is to find alternative revenue sources.

In this context, Addabbo is hopeful that the legalization and launch of online casino gambling will play a crucial role. He believes that the tax revenue generated from this venture could significantly contribute to offsetting the budget deficit. As such, Addabbo is optimistic that iGaming will be a topic of discussion among state lawmakers in the upcoming February and March sessions, with the goal of including it in the April budget vote.

Final Thoughts

In summary, New York is on the cusp of a pivotal change with Senator Joseph P. Addabbo Jr.’s upcoming introduction of a bill to legalize online casinos. Building on the success of mobile sports betting, this move could significantly boost the state’s revenue, potentially surpassing $1 billion annually. The proposed legislation aims to expand the market by offering over 20 operator licenses and includes plans for an online lottery.

With a lower tax rate than sportsbooks and a focus on addressing cannibalization concerns and problem gambling, the bill is designed to balance revenue generation with responsible gaming. As the legislative process unfolds, the outcome could profoundly impact New York’s fiscal landscape and gaming industry.

Source:https://www.budget.ny.gov/pubs/archive/fy24/en/fy24en-fp.pdf#page=20

https://www.budget.ny.gov/guide/brm/fy25-call-letter.pdf

 

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