Updated New York Online Casino Bill Filed In Senate

January 12, 2024
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New efforts to legalize online casino gaming in New York, which would be a crown jewel for the slowly-expanding U.S. iGaming market, began in earnest Thursday with the filing of new legislation in the state’s Senate.
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New efforts to legalize online casino gaming in New York, which would be a crown jewel for the slowly-growing U.S. online casino industry, began in earnest on Thursday (January 11) with the filing of new legislation in the state’s Senate.

Senate gaming committee chair Joseph Addabbo filed Senate Bill 8185 , which would legalize online casino games and authorize a wide range of industry stakeholders to participate in what would be expected to become one of the world's largest regulated iGaming markets.

Under the bill, each of the state’s casino licensees, including destination-resort casinos and downstate video lottery terminal facilities, as well as mobile sports-betting operators, would be authorized to offer online casino gaming. 

Indian tribes would also be permitted to offer online gaming, but would first have to reach an agreement with the New York State Gaming Commission to submit to enforcement requirements and to waive the tribe’s exclusive geographic rights to offer gaming on their land to facilitate iGaming.

If tribes do not submit to that agreement, they would not be permitted to offer online casino gaming, but their tribal land would be geoblocked to other operators.

The bill would also allow the commission to award up to three additional competitively bid licenses. The commission would be required to set its own criteria for licensure, release a request for applications within 180 days of the bill becoming law, and could award licenses on a rolling basis.

Each license would include only one online gaming skin.

Licenses would come with a $2m license fee for casino operators, while any “independent contractor” that provides a online gaming platform and displays its brand would pay a $10m fee.

The bill would also set a 30.5 percent tax rate on all online casino gaming, a figure lower than the state's infamous 51 percent tax rate on sports betting.

Many of the state's sports-betting operators have pushed for a reduction in the sports-betting tax rate as part of online casino conversations, but the bill makes no changes to the existing sports-betting structure and does not add any additional sports-betting licenses to the state's offering.

Many of the provisions are similar to online casino legislation that was introduced by Addabbo in 2023, but several new provisions were added to the new bill, presumably in hopes of assuaging the concerns of key potential opponents.

One is the addition of online lottery games in addition to online casino, as the bill would permit “interactive lottery gaming”, as well as the online sale of “interactive lottery tickets.”

Meanwhile, the bill creates a fund for the purpose of “employee training, responsible gaming training and education, health, and development” of at least $25m a year for employees of licensed commercial gaming facilities and administered by the labor union that represents the employees.

That provision is designed to win over the New York Hotel and Gaming Trades Council, the union that represents hotel workers in the state that was an opponent of online casino legislation in 2023, fearing cannibalization of land-based casino revenues and an accompanying loss of jobs.

Despite the new language, approval of Addabbo's bill is far from guaranteed this year.

Proponents face the challenge of passing online casino legislation while another major gaming expansion initiative remains in the early stages, as potential applicants for one of three downstate casino-resort licenses await the start of a high-stakes licensing process.

Once a set of applicant questions are answered by regulators, applicants will have 30 days to submit their bids for the three available licenses.

If online casino is approved in 2024, the launch date for the new program would likely come before those new casinos even open their doors, adding an increased layer of complexity as the state seeks a minimum $500m capital investment for each new licensee.

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