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New York Legislators Table Bill to Introduce Online Casino Gaming
By Jeff Osienya Feb 25, 2023 LegalitySenator Addabbo, The Empire State’s champion of gaming expansion, is leading legislators for another run at okaying regulated online casino gambling within state lines. Here’s a closer look at the bill and its potential for New York.It has been roughly one year since New York debuted mobile sports betting, smashing back-to-back records to become the country’s largest online sports betting market. On the back of that success, there are plans for legalized online casino gaming to follow that same trajectory if things go as planned.
New York state senator Joseph Addabbo has now introduced bill S4856, which, if passed, will legalize online casino gaming, including slots, table games, online poker, and live dealer games – where live dealer studios will receive some forms of restrictions. However, the iGaming legalization measure is still in its infancy and is said to have divided opinions across the board.
As you may already know, this isn’t New York’s first trip down this route, and it is fair to say it has been a futile venture so far, unlike other forms of gambling. The state legalized daily fantasy sports in 2016, then okayed retail sports betting in 2019 before its much-publicized approval of online and mobile sports betting in 2022. Online casino gambling is the one area that has eluded the state, with previous close calls in 2016 and 2017 forming a history of frustrating losses.
Two Dozen iGaming licenses Could Be Up for Grabs in NY
The drive to legalize online casino gaming in the Empire State kicked off in Albany, with the main talking point being the 30.5% gaming tax rate. However, given that most states go with a 15 to 18%, this aspect of the bill is sure to get tongues wagging.
Nonetheless, having a rate double the national average shouldn’t come as a surprise, as NY is known for its extravagance when it comes to such taxes. For instance, its 51% online sports betting tax rate is, in fact, one of the highest in the country.
Further, the bill proposes that the following entities be allowed to apply for iGaming licenses:
- Three forthcoming upstate casinos
- Four downstate commercial casinos currently in operation
- The Seneca, Oneida, and Mohawk tribal casinos,
- The Empire City and Resorts World racetracks
- Existing sports betting operators (BallyBet, BetMGM, BetRivers, Caesars, DraftKings, FanDuel, PointsBet, ResortsWorld Bet, and WynBett)
Additionally, three licenses will be awarded via a competitive bidding process for independent applicants having a minority ownership of at least 5%. Any extra operator will be required to sign a peace agreement with labor unions that look after the welfare of workers, committing to actively look at the interests of the workers.
This means that 24 licenses could be up for grabs. Still, the number is expected to decrease due to the overlap between casino operators and licensed sportsbooks—that and the fact that both racinos will compete for a downstate casino license. Meanwhile, alongside the pretty high tax rate, the bill also features a multi-level licensing fee ranging from $2 million to $10 million, depending on the branding structure of the parties involved.
A report from Spectrum Gaming Group prepared for the New York State Gaming Commission indicated that NY could generate annual revenue of about $4.4 billion by the fifth year of operation. With such a performance, the Empire State expects to rake in about $1 billion annually for its state coffers should the online casino gaming bill sail through.
Responsible Gambling A Key Pillar of the Bill
Responsible Gaming forms part of the cornerstone upon which state Sen Addabbo’s bill is built. Speaking to LSR (Legal Sports Report) on the matter, he said:
Quote“With iGaming, probably our biggest challenge, bigger than the downstate licenses, bigger than mobile sports betting, is the challenge of addiction with iGaming. I think it’s trickier, and therefore we’ll look for more funds and more in tune with the OASAS (Office of Addiction Services and Support) on how we address addiction even further.”
In that regard, the bill has set aside some provisions. First, it requires $11 million of annual tax revenue to be set aside for problem gambling. Secondly, the bill stipulates that after $2,500 in deposits by any person, an operator must automatically trigger a responsible gambling warning. Finally, the bill proposes an annual cap of $2,500 on deposits by credit card.
The Governor Might Not Play Ball
Despite all the practical frameworks of the iGaming bill, it faces the daunting task of going through the form of Governor Kathy Hochul. Unfortunately, the governor failed to include iGaming provisions or plans in her recent executive budget for the Fiscal Year 2024. This move is a signal that the governor may not be too keen on the bill.
Governor Hochul had even suggested using the downstate casino license fees and tax revenues reserved for education to instead fund MTA (Metropolitan Transportation Authority) for the year 2026. However, Senator Addabbo acknowledged that this wasn’t a good sign for his bill’s survival but argued that iGaming revenue could be used in MTA funding even before 2026.
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