New York has emerged as a national hotspot for online sports betting. It broke the mobile sports betting handle record previously held by New Jersey in its first three weeks. State Senator Joseph Addabbo’s New York online casino bill, S8412, would legalize online slots and table games in New York. If this bill passed, New York’s online casino tax revenue could be double its mobile sports betting tax revenue.
From January to April 2022, New York mobile sports betting generated $216.7 million in tax revenue. According to our projections, online casinos could’ve made New York another $484.2 million in state tax revenue over that same period.
New York Online Casinos And Mobile Sports Betting By The Numbers
New York sports bettors have wagered over $1.3 billion each month that online sports betting has been available. Its success has generated new interest in allowing online casino games, which are historically more profitable than sports betting.
Bill S8412 is currently in the finance committee where its fiscal impact is being measured. After it leaves the finance committee, it has to be put on the floor calendar for a vote. If it passes the Assembly and the Senate, then it’ll go to the governor’s desk for her signature. So, online casino gaming is still months or years away.
Why New York Online Casino Tax Revenue Could Be So Much Higher
“There’s a larger population who would probably take part in igaming, which is why the revenue from igaming would be so much greater than, in my opinion, and estimation, the revenue from mobile sports betting,” State Senator, Joseph Addabbo, said. Addabbo’s assertion is consistent with surrounding the two largest igaming markets. Take these two neighboring states as an example:
- Pennsylvania: Online casinos generated about twice as much taxable revenue as mobile sportsbooks
- New Jersey: Online casinos generated about 1.7 times the gross revenue of mobile sports betting
Both states now can be considered mature markets, with New Jersey legalizing online casinos in 2013, and Pennsylvania following in 2018. There is an argument that New York is lagging years behind other states that have been more forward-thinking in their approach to online gambling.
Opposition To Online Casinos
Opponents of online gambling’s expansion have cited state constitutional issues and increased problem gambling. New York’s state constitution limits gambling to the casinos. Processing New York sports wagers through the servers in New York’s casinos solved the constitutionality problem.
The increase in problem gambling is more concerning. However, Bill S8412 calls for $11 million in problem gambling education and treatment. That’s almost twice the $6 million that is currently dedicated to gambling addiction as New York’s mobile sports betting bill in the state assembly.
“I think there’s a bigger population that would do it, therefore I’ve got to be more concerned and make an extra effort to address the addiction issue,” Addabbo said.
Nerd Box: Projecting New York iGaming Tax Revenue In 2022
In 2021, Pennsylvania igaming generated over 2.3 times more state tax revenue than mobile sports betting did. In New Jersey’s 2020/21 fiscal year, igaming made over 2.1 times the state tax revenue of mobile sports betting. We averaged that factor from the two largest igaming markets in the United States to project igaming tax revenue from mobile sports betting tax revenue.
Pennsylvania has publicly measured its success in combatting problem gambling. A total of 51% of discharged outpatient problem gambling patients stopped gambling altogether from 2019 to 2020. Another 12% reduced their gambling. That’s a particularly important level of success for a state with online casinos. During that same year, 51% of callers on the problem gambling helpline were calling about slots or “unspecified casino” games.
If New York legalizes online casinos, then Pennsylvania, in particular, could be a potential model for responsible gaming programs. It’s one thing to fund problem gambling programs in greater amounts. But ensuring that money spent translates to positive outcomes for problem gamblers will be the real test of New York’s online casino framework.