February 24th, 2023: New York is set to join dozens of other US states to allow betting on casino games online using their mobile devices. New York State Senator Joseph Addabbo has filed House Bill S4856, seeking to legalize iGaming in the state. The bill aims to legalize online casino games such as video slots, live dealer games, and table games.
With this bill, the state plans to follow the success of mobile sports betting. According to State Sen. Joseph Addabbo (D-Queens), it’s time for New York to enter the next frontier of internet gambling on table games, which has been legalized in seven states, including neighboring New Jersey and Pennsylvania.
Here’s what to expect from the bill
Mobile sports betting is already popular in the state, and online slots and table games are big in dozens of others. For Senator Addaboo, it’s about time the state fully embraces iGaming. If the measure passes, NY residents can bet and play slot machines and table games online. However, it does not cover poker games.
House Bill S4856 includes a 30.5% iGaming tax rate, generally higher than tax rates in other states. “I’ll say with confidence we can do at least $1 billion with iGaming. I think more, but I’ll say conservatively we can do $1 billion annually,” Senator Addabbo Jr. told ESNY.
A robust online gambling industry
With a multi-level licensing fee ranging from $2 million to $10 million, Sen. Addabbo states that the bill would lead to a robust online casino gaming industry in New York. House Bill S4856 requires $11 million in annual tax revenue for gambling problems. Also, it institutes a $2,500 yearly cap on credit card deposits.
Initially, the bill would create up to 24 licenses for casino operators. Under the bill, certain casinos can obtain iGaming licenses. iGaming licenses are also reserved for commercial casinos in four upstate and three downstate. It also opens licensing opportunities for tribal casinos such as Seneca, Oneida, and Mohawk.
The bill also grants licenses for Racetracks such as Resorts World and the Empire City. It also covers nine licensed sports betting operators. These include FanDuel, DraftKings, Caesars, BallyBet, WynnBet, Resorts World Bet, BetMGM, BetRivers, and PointsBet. Moreover, there are three additional licenses available for the competitive bidding process.
Battle to reduce tax rates on sports betting
The introduction of this iGaming bill aims to expand the New York online sports betting operators to 14 operators by January 31, 2024, and up to 15 operators by January 31, 2025. Nine sports betting operators are also optimistic about getting iGaming licenses with this House bill.
According to FanDuel President Christian Genetski and DraftKings CEO Jason Robins, the legalization of iGaming in New York can help increase operator taxes and revenues for the state. The introduction of this bill is good news for online sports betting operators as they fight to reduce the current online sports betting tax rate of 51%. Moreover, the recently introduced bill will allow New York casinos, tribes, and racinos to secure an iGaming license. However, Robins have warned the racing, gaming, and wagering committee members that it’s an untenable tax rate for the state.
Bill expected to face some challenges
Although the bill would benefit many online operators across the state, its passage still faces an uphill battle and will not be easy. iGaming provisions or plans were not included in Governor Gov. Kathy Hochul’s recent executive budget proposal for Fiscal Year 2024. Instead, Hochul suggests using downstate casino license fees and tax revenue to fund the Metropolitan Transportation Authority (MTA) in 2026.
But, Sen. Addabbo suggests that revenues for iGaming online casino gaming could be used for MTA funding sooner than 2026. “iGaming will eclipse what we do with mobile sports betting, that revenue, and probably come close to eclipsing downstate licenses,” Sen. Addabbo Jr. said.