Online Casinos Coming to New York in 2023?

Online Casinos Coming to New York in 2023?

The Game Day Casino Team

April 18, 2022 5:01:31 pm

Senator Addabbo Provides Answers

New York State was relatively late to the online sports betting industry, but the market has been booming so far. Riding on the momentum from mobile betting on sports, New York Sen. Joseph Addabbo Jr., a Democrat, wants to soon bring online casino gaming to New York.

Addabbo, chair of the Senate’s Committee on Racing, Gaming, and Wagering, was a leading figure behind modernizing New York’s casino industry to include online sportsbooks. But he isn’t done yet.

Legalizing online casinos in New York would bring the state up to speed with gaming expansion efforts in neighboring New Jersey and Pennsylvania. Michigan, Connecticut, and West Virginia are among the other states with both online sportsbooks and casinos. In addition, the likes of Indiana and Illinois, both home to mobile sportsbooks, are considering iGaming legalization.

In an interview last week, Addabbo told The Game Day Casino that he expects his iGaming measure, filed as Senate Bill S8412 in its current form, to cross the finish line next year.

iGaming Off Table In 2022, But 2023 Is Promising

According to Addabbo, the filing of his iGaming bill earlier this year was a bit too late for the proposal to have a chance at gaining traction this year.

“We introduced it back in February, which was unfortunately after the budget process had started. So it was a little too much too late," Addabbo said.

Still, Addabbo sees a lot of value in continuing the conversation formally through a bill on the table this legislative session. Prior to legalizing online sports betting, New York tried over multiple legislative sessions to legalize peer-to-peer online poker.

“We’ve had a great discussion about the issues and concerns we need to address [regarding iGaming]," he said. “We are forming a foundation. iGaming in New York is not a question of if but when. So if not this year, certainly we lay the groundwork for a push in next year’s budget. Next year we probably won’t have federal aid to help us. We are looking for revenue, so we will make our case to do it [iGaming] safely in NY."

“I am a realist," he added. “It is building momentum for next year. If my timeline is correct, it will be sometime next fiscal year."

Just like the argument for legalizing and regulating online sports betting, Addabbo pointed out that New Yorkers are already gambling online via offshore websites that are not square with the law. New Yorkers can also spend their money on online casino games through so-called sweepstakes casinos, which are not illegal but don’t pay taxes to New York. Legalized real-money commercial online casinos would.

“Right now, New Yorkers are doing [iGaming], but they are doing it illegally," he said. “Like I made the argument with mobile sports betting, if you want to help someone with addiction, let’s regulate it, so not only do you get the revenue and the educational funds, you can help people with addiction because you can monitor their [gaming] activity."

Tax Revenue Estimate Could Be Conservative

The legislation in its current form calls for a 25% iGaming tax rate, along with $10 million annually for an iGaming license. Addabbo estimates that New York could collect as much as $475 million annually in taxes from online casino slots, table games, and poker.

The projection means that New York could see an iGaming market of around $2 billion annually, a plausible number considering that New Jersey’s online casinos won more than $1.3 billion in 2021, according to figures from the New Jersey Division of Gaming Enforcement. New York has more than double New Jersey’s population.

“All I know is that we have that potential," Addabbo said. “I would say yes, $475 million is a conservative number, but we won’t know until we try it. But it’s about the product. I think the reason why New York mobile sports betting is doing so well is because a) there was an appetite, and b) the product is from experienced operators. Same thing with iGaming, but we are playing a little bit of catch-up with other states. It is all about the product."

Legal and regulated iGaming is still relatively nascent in the U.S., so the industry will continue to innovate and improve products.

Does Ontario Launch Add To NY iGaming Momentum?

An added wrinkle to the situation is the recent launch of online casinos and sportsbooks in the Canadian province of Ontario. Games went live on April 4, giving Canada’s most populous province, which borders New York, access to legal real-money sites.

Addabbo doesn’t see Ontario drawing in too many New Yorkers to gamble on online casinos when a trek to Pennsylvania or New Jersey is easier. Still, he acknowledged that Ontario in the equation has his state situated in arguably North America’s epicenter of regulated iGaming. New York will not want to fall behind.

“Getting into Ontario or Canada is harder than getting into New Jersey or other neighboring states," Addabbo said. “So we look at other states, but even if we were to talk about Ontario … Jersey, Ontario, and so on, those are the ingredients we use in our talking points about why New York should do it. We are surrounded. It’s a trend, and it’s certainly the way things are going. Why should New York lose out?"

iGaming is a natural addition to New York, one that Addabbo doesn’t see as especially groundbreaking at this stage of the game. It just makes good policy sense for New York.

“We are talking now about activating three downstate gaming [casino] licenses. We’re doing mobile sports betting … we aren’t reinventing the wheel here," he said. “What we are doing is credibly and safely expanding gaming in New York, so we can realize a certain number of jobs and revenue and fight addiction. iGaming would be another piece of the puzzle."

Expanding Sports Betting Alongside iGaming Effort?

Perhaps less pressing but certainly on the horizon is New York making changes to its sports betting market to make it even more competitive. That could come alongside iGaming efforts, depending on how sports betting continues to unfold.

One of the possible plans is to increase the number of mobile sports betting skins allowed.

“I think you can have that talk simultaneously," the Democrat said. “I think they can go on parallel lines. It might be too premature to look at currently expanding mobile sports betting since we are doing so well. So to evaluate it 6-8 months from now is probably the healthier thing to do. We should always stand at the ready."

Addabbo praised his staff for never becoming complacent on gaming expansion issues.

“I’m so proud of my team for not sitting back and saying, ‘we did mobile sports betting, and it’s successful, so let’s forget [about] it.’ Instead, we think about how do we make it even better. We could expand it with additional skins, incorporate horse racing, or maybe something else. So the idea is to be ready to improve an already successful product. We’ll continue to have those conversations."

Mobile Sports Betting Exceeded Expectations

Regardless of what happens in the near term with iGaming, Addabbo and his colleagues who championed mobile sports betting are still enjoying the fruits of their policy labor. New York is the largest sports betting market in the U.S. based on handle, a popular market measuring stick.

New York’s sportsbooks took about $1.6 billion in bets in January 2022.

Addabbo was taken a bit by surprise that his state jumped to no. 1 so quickly.

“It was how fast we did it," he said. “I’ve always known that New York had that potential. We know the population; we saw 25% of New Jersey’s online [market] was New York, so there was an appetite to do it in New York. But we hit January of this year, and you break the national handle record for a month in our first month, with only four active mobile sportsbooks. I was like, ‘WOW.’ I knew it had potential, but that quick? Now we are three months in and at $150 million in revenue, for the education fund, the numbers have been outstanding. That has surprised me, not the potential, but the timeframe in which we have done it."

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