State Sen. Joseph P. Addabbo Jr. spoke to Bonus on Feb. 16 about S4856, the iGaming bill he introduced on Feb. 15. He said the measure that analysts believe would generate $1 billion a year in New York online casino tax revenue through its 30.5% tax rate can still be amended in order to pass in 2023.
For instance, Addabbo said online casino gross gaming revenue (GGR) could be rerouted from education toward Gov. Kathy C. Hochul‘s priority of filling the $600 million budget gap faced this year by the Metropolitan Transportation Authority (MTA).
Addabbo, D-Ozone Park, told Bonus today:
It all starts with a conversation. I’m a realist.
That’s why his next plan is to organize a “roundtable discussion” in early March with lawmakers and industry stakeholders. Addabbo said it’ll be more informal than the joint public hearing held on Jan. 31 to review the first year of the mobile sportsbook marketplace.
While reporters are welcome, the meeting won’t be recorded like the Jan. 31 hearing. Plus, it will be an “open discussion” like the 2019 meeting that resulted in an agreement to proceed with three Downstate New York retail casinos. That licensing process is already two months old.
Raising Interest in New York Online Casino Tax Revenue
Addabbo told Bonus today that legalizing New York online casino gambling will require more than the work he and his team are putting in. Hochul and his fellow legislators must have an “appetite” for the tax revenue.
He pointed out that currently, Hochul is talking about 2026 tax revenue from retail casino license applicants that a board appointed by the New York State Gaming Commission (NYSGC) hasn’t yet selected.
However, Addabbo said 2026 is “too long” to wait.
Personally, he finds the current situation of New Yorkers spending their online casino and poker dollars in New Jersey, Pennsylvania, or on illegal sites “frustrating.” He wants that $1 billion in state coffers.
That’s one reason legalizing iGaming matters, he said.
Another is the ability to find problem gamblers through registrations on legal sites, then get them help, Addabbo said. S4856 outlines $11 million a year for problem gambling efforts.
If we do enact [iGaming] this year, we’re realizing some revenue next year. That’s my hope.
He acknowledges there are obstacles.
Legalizing online casino and poker gambling wasn’t in the $227 billion Fiscal Year 2024 Executive Budget that Hochul announced on Feb. 1. However, the budget won’t be final until members of the New York State Legislature pass it in April.
A lot can happen in five weeks of budget negotiations. … Stay tuned.
New York iGaming Revenue Will ‘Eclipse’ Sports Betting
Addabbo emphasized again today that New York online casino tax revenue will “eclipse” that of the already No. 1 in the nation sports betting marketplace.
State coffers saw $909 million in tax revenue and license fees during the first year of legal New York sportsbooks, according to Hochul.
That’s with a 51% tax rate, which DraftKings and FanDuel leaders testified on Jan. 31 was too high to make the sports betting marketplace sustainable. DraftKings CEO Jason Robins and FanDuel Group President Christian Genetski asked lawmakers to lower the sportsbook tax rate. Robins suggested New York rival Pennsylvania’s 36%. Then they both urged legislators to legalize iGaming.
Speaking of Pennsylvania’s tax rate, Addabbo explained to Bonus today how he arrived at the tax rate for New York online casino gambling.
A very popular question. It’s competitive. It’s competitive with other states.
That tax rate should bring in $1 billion a year in GGR, analysts tell Addabbo.
Trust the Process
Before any New York online casino tax revenue can be collected, the bill must become law. Then, about 15 skins will be available through an NYSGC license selection process that S4856 says begins on July 1. That’s when the bill says the commission will issue a request for applications.
On Aug. 1, those applications from prospective operators will be due, Addabbo told Bonus today.
Also, yes, that application process does pertain to New York’s nine sportsbooks, he said. There are no automatic approvals.
Addabbo added this about existing online gambling operators applying for online casino licenses:
They will be on the fast track.
If the commission approves those operators for licenses, S4856 says each license for an existing operator will cost $2 million. The $10 million fee is for out-of-state applicants.
Meanwhile, there’s no movement on two iGaming bills introduced in 2023 by state Assemblyman J. Gary Pretlow, D-Mount Vernon. On Jan. 17, he sponsored A1380, which would legalize online poker. On Feb. 3, Pretlow introduced A3634 to legalize online casinos. His online casino bill includes a 25% tax rate on operators.
So the process to legalize iGaming in New York is underway.
Addabbo said to Bonus today about S4856:
Let people start to become comfortable and versed with the bill.
Then the early March roundtable discussion will uncover how far the bill may go this year.