Gaming Industry Makes Pitch For Online Casino In New York

March 8, 2023
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New York state legislators said Tuesday that in order for online casino legislation to be considered this year, it will have to be included in one of the legislature’s one-house budget proposals to be finalized this week.

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New York state legislators said Tuesday (March 7) that in order for online casino legislation to be considered this year, it will have to be included in one of the legislature’s one-house budget proposals to be finalized this week.

Senator Joe Addabbo, a Democrat and chairman of the Senate’s Racing, Gaming and Wagering Committee, hosted a roundtable discussion in New York City along with his Assembly counterpart Democratic Representative Gary Pretlow to take input from more than a dozen gaming industry executives on the subject of pending online casino legislation.

About half of the two-hour meeting was open to media, and during that time, Addabbo made clear that the window was quickly closing on any hopes of legalization this year.

“This is our moment,” Addabbo told industry representatives. “I’m telling you now, we have days before the one-house budgets get finalized.

“If it’s not in the one-house [proposals], we’re done for this year, I’ll stop talking about it,” he added. “I will not be the only one out there talking about this.

“If you don’t do it this year and you start to do legislation for next year, that means 2025 [launch], and that’s another billion dollars lost, or more,” Addabbo said. “It’s at our table right here, we can do this, but it’s not just going to be me and Gary, it has to be collectively.”

While New York’s 2023 legislative session is set to end in June, its budget process tends to be where most revenue-raising legislation is approved as part of a larger budget package.

Through the process, budget bills from both the Senate and Assembly are compared with Democratic Governor Kathy Hochul’s executive budget proposal through several weeks of negotiations that are supposed to culminate in time to begin the new fiscal year on April 1.

Addabbo filed Senate Bill 4856 last month, proposing to allow New York casinos, racinos, Indian tribes and mobile sports-betting operators to obtain interactive gaming licenses, in addition to creating three additional untethered licenses.

Operators would pay a $2m one-time license fee for a ten-year license fee, with a $10m fee applied to any third-party contractor to provide a platform and display its brand on a licensee’s online offering.

Pretlow said that one of the takeaways from the private meeting was that the industry consensus appears to support the bill.

“It happens a lot where industry people get together, they sing Kumbaya, and then everyone leaves the room and the phone starts ringing,” Pretlow said. “If we’re going to be moving forward, we have to be doing it in unison.”

Industry representatives stressed that online casino in New York would not only be a massive revenue generator for New York, but it would reshape online gaming in the U.S. and make New York a key player on the global stage.

“If this bill were to pass, New York would be the epicenter of iGaming in the U.S.,” said Matt King, CEO of Fanatics Betting and Gaming.

King, the former FanDuel CEO, explained that when sports betting initially expanded in the U.S., many operators favored a copy of successful European sports-betting products in order to get to market immediately, but over time they have brought more of the technology functions to the United States.

“You are better off creating the products in-market versus trying to go to Eastern Europe or somewhere else and try to have them understand the U.S. market,” he said.

“[Internet gaming] is probably five years behind that … and part of the reason it’s slower is that the market in the U.S. is perceived to be not yet as mature and not yet at a scale where people are saying let’s move resources here.”

King told lawmakers that what New York has an opportunity to do is bring about a significant expansion of the U.S. iGaming market.

“I think with a little bit of a push, you could go to, frankly, all the people in the room and say it’s really important that we develop this, that New York becomes not just the biggest market from a consumer perspective, but we become the epicenter for innovation in iGaming,” King said.

“I think you could very easily get a lot of companies making a commitment to New York, because they would recognize this is a huge opportunity for the industry overall,” he added.

Currently, New Jersey, Pennsylvania, West Virginia, Delaware, Michigan and Connecticut are the only states that have legalized online casino gaming. Nevada has also approved interactive gaming, but only for online poker.

Supporters of iGaming had targeted Indiana and New York as arguably the two states most likely to legalize online casino gaming this year. However, iGaming legislation in Indiana died following a February 21 deadline for bills to advance out of House committees. Legislation is also being considered in New Hampshire and Maryland.

Howard Glaser, global head of government affairs and legislative counsel with Light & Wonder, also cautioned legislators that New York’s status as a “donut hole” surrounded by states with legal online gaming could ultimately hurt the state's existing gaming interests in the long term.

“What’s the implication of that, over the long term, think a couple of years down the road, if that maintains itself?” Glaser said.

“Don’t give up the digital channel to your competitive states, because they’ll bring [New York players] back over, not because of the iGaming specifically, but because they’re building a customer base and bringing in revenue that’s now not available here.”

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