It’s a new year, and in a couple of days, state Sen. Joseph P. Addabbo Jr. said he will introduce freshly created New York online casino legalization plans. In an interview with Bonus on Jan. 8, Addabbo said the new online casino bill will be designed to build on the success of mobile sports betting.
The chairman of the Senate Racing, Gaming, and Wagering Committee told Bonus:
It’s apropos that we’re talking today.
Two years ago, on Jan. 8, 2022, online sportsbooks launched in New York. Measuring progress by dollar figures, December 2023 receipts show those nine online gambling operators generated $188.3 million in gross gaming revenue (GGR).
That means New York is not only No. 1 in the mobile sports betting realm, but it even nears the No. 1 online casino state’s revenue. Pennsylvania brings in the top iGaming GGR of all of the legal online casino states. Its most recent figure is $191.9 million in GGR in November 2023. Plus, in iGaming states offering online casinos and sports betting, the former accounts for 70% of GGR, Bonus analysis finds.
Addabbo, D-Ozone Park, also believes online casino gambling revenue can outpace New York online sportsbook GGR.
So, Addabbo said, it’s conceivable that New York online casino gambling could generate $1 billion a year, as analysts tell him.
Not only that, Addabbo is designing the upcoming online casino bill to provide 20 or more operator licenses. That’s more than double the current number of legal sportsbooks.
Addabbo thinks more operator competition will benefit New Yorkers.
He told Bonus on Jan. 8:
To me, the more skins, the better product.
The bill will also include guidelines for creating an online lottery. Currently, New York Lottery players must buy tickets at retail locations or pay lottery ticket couriers to do so for them.
New York Online Casino Legalization Plans
Addabbo told Bonus he will propose a bill that calls for a 30.5% tax rate on operators who will pay a $2 million license fee. Three operators who don’t partner with land-based casinos — AKA, “untethered” operators — will also be allowed to purchase licenses that will cost more than $2 million. However, Addabbo told Bonus that he hasn’t yet enumerated the increased cost in the bill draft.
Addabbo also told Bonus that the proposed legislation could change as discussions continue with fellow state lawmakers, retail casino union representatives, Gov. Kathleen C. Hochul, and other stakeholders.
However, at the moment, New York online casino legalization plans remain as stated.
So, the proposed iGaming tax rate is far lower than the 51% rate New York sportsbook operators pay. That 30.5% tax rate also differs from other states’ tiered online gambling taxes. For instance, Pennsylvania taxes online slots at 54%.
Alleviating Cannibalization Concerns
Addabbo and his committee counterpart in the New York State Assembly, J. Gary Pretlow, are designing online casino bills that will provide $25 million to train retail casino workers who may be affected by iGaming cannibalization of land-based casino revenue. Previous online casino legalization efforts encountered opposition from their union, the New York Hotel and Gaming Trades Council.
Addabbo informed Bonus that New York online casino legalization plans must account for workers’ concerns, even though he believes that legalizing iGaming will complement retail casinos and increase land-based casino revenue.
Addabbo emphasized to Bonus:
We do believe that there is a coexistence.
Plus, unions will welcome more members once the online casino live dealer studio is built in New York and those croupiers join their ranks, he said.
Addressing Problem Gambling Funding
Addabbo told Bonus the online casino bill will include $11 million in funding to address gambling addiction. That’s nearly double the $6 million allocated for problem gambling by the state’s online sportsbooks. The remainder of the tax revenue benefits New York State’s K-12 public schools.
Addabbo added that the gambling apps themselves aid in providing New Yorkers with addiction help because the sites are legal. Because betting behavior is more apparent on the regulated apps, it’s easier to reach out to residents who need help.
He did so in September, offering a free webinar during Responsible Gaming Education Month. A speaker from the New York Council on Problem Gambling (NYCPG) told his story of addiction and recovery.
Addabbo may offer another webinar in March, which is Problem Gambling Awareness Month.
Speaking of NYCPG, New Yorkers seeking responsible gaming or problem gambling help often see links to NYProblemGamblingHelp.org. Once there, they see links to NYCPG programs, the New York State Office of Addiction Services and Supports (OASAS), and the New York State Problem Gambling Resource Centers (PGRCs).
Sportsbooks also direct bettors to call New York State’s HOPEline at 1-877-8-HOPENY (1-877-846-7369).
The Path the iGaming Bill May Take
In April, the New York State Legislature will pass a budget for Fiscal Year 2025.
Leading up to that vote, lawmakers will attempt to pass bills that need to be included in that budget to be funded. That includes Addabbo’s online casino bill.
However, the first step belongs to Hochul.
FY2025 Executive Budget
Within the month, Hochul will publish the FY2025 Executive Budget. It’s likely to be pretty spare, as the state budget director hinted in a September letter to department commissioners, reminding them that their budget requests were due on Oct. 11, 2023.
Blake G. Washington — Director of the Budget, New York State Division of the Budget (NYSDB) — wrote:
Commissioners must be mindful of Governor Hochul’s commitment to deliver critical services while protecting our state’s fiscal health. As you develop agency budget requests for FY 2025, they should not exceed the total FY 2024 Enacted Budget agency funding levels, excluding one-time investments.
The budget for fiscal year 2024 was $229 billion.
Despite that austerity effort, Addabbo told Bonus that New York is looking at a $4.3 billion deficit.
While that total isn’t as bad as the expected $9.1 billion shortfall forecast in the previously enacted budget, it’s still a deficit.
Add to that news that Addabbo said he agrees with Hochul that New York shouldn’t raise taxes, and the revenue has to come from somewhere.
Addabbo told Bonus on Jan. 8:
You can’t cut your way out of a $4 billion deficit.
He believes legalizing and launching online casino gambling can generate tax revenue that will help offset the shortfall.
So, Addabbo hopes Hochul includes iGaming for state lawmakers to discuss in February and March so that it’s included in the April budget vote.
Final FY 2025 Budget
Addabbo told Bonus that he’s hoping for “robust” talks between Hochul, state lawmakers, and unions.
He said to Bonus about the online casino bill he plans to introduce:
I can’t be the only one and I won’t be the only one discussing this. This is a starting point.
However — as he and Assemblyman Pretlow, D-Mount Vernon, did in 2023 — Addabbo told Bonus on Jan. 8 that he is ready to let go of his New York online casino legalization plans if the iGaming bill isn’t included in the April budget.