Online Gaming Supporters Make Case For Legalization In New York

February 3, 2023
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While conversations about three available downstate casino licenses and reducing the sports-betting tax rate are more prominent in New York, supporters of online casino gaming are laying the groundwork to ultimately bring the activity to the Empire State.

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While conversations about three available downstate casino licenses and reducing the sports-betting tax rate are more prominent in New York, supporters of online casino gaming are laying the groundwork to ultimately bring the activity to the Empire State.

State Senator Joseph Addabbo, a Democrat, said this week that a roundtable discussion is coming “in the very near future” on the topic of online casino legislation.

Democratic Governor Kathy Hochul’s executive budget, which was released this week, did not have iGaming legislation included in the plan, and one-house budget proposals from both the Senate and Assembly will be released next month as part of New York’s annual budget battle royale.

“Every year we don’t do iGaming in New York, if you do the math, there’s roughly $4bn lost if you think of it that way, revenue lost, and lost to another state and to the illegal market,” Addabbo said. “This was the argument we made for mobile sports betting before we had [it], they were going to another state, they were doing it illegally, and every year we lost billions of dollars.

“I’m just saying if we want to stop the proliferation of money going to another state and to the illegal market and recognize that money for education here, I would think that New York should do something, but it’s a topic for a different day, I guess,” Addabbo said.

Several industry executives, including DraftKings CEO Jason Robins and Light & Wonder head of government affairs Howard Glaser used a captive audience during the January 31 hearing on sports betting to push legislators to consider online casino.

Robins argued that legalizing online casino could help take the sting out of New York’s high mobile sports-betting tax rate of 51 percent.

“States like New Jersey, Connecticut, and Pennsylvania have authorized iGaming, and results have shown that iGaming’s success can come without cannibalizing existing retail gaming operators or the lottery, and certainly without experiencing the hyperbolic, doomsday scenarios that many opponents recklessly predict,” Robins said.

“It is time to look past the rhetoric and focus on how legalizing iGaming can fund crucial state services in New York,” he said.

Glaser cited a research report by VIXIO GamblingCompliance and commissioned by Light & Wonder that projects $2.1bn in annual online casino revenue if the Empire State were to legalize the activity. The state produced more than $1.3bn of gross revenue in its first year of online sports betting.

“In all of these states, those states have found that while sports betting is a good appetizer, iGaming has proven to be the main course as far as revenue generation is concerned,” Glaser said.

Still, passing online casino legislation, at least in the short term, may be a challenge.

Much of the state’s gaming policy bandwidth in 2023 will be absorbed by the process of selecting three licensees to operate casinos in the downstate region of New York, largely in and around New York City.

Several major operators have already announced their intent to pursue one of the three casino licenses, and passage of an online casino bill while such a public process is ongoing appears unlikely.

However, a robust conversation on the issue and related policy matters could help lay a foundation for future sessions after the dust settles on the downstate casino licensing process.

Addabbo introduced online casino legislation in 2022, and is expected to do so again in this legislative session, which runs through June.

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