New York Senator Addabbo Launches Second Attempt at iGaming Regulation

The Empire State is ushering in the new year on a high note by taking another stab at legalizing online casino gaming. By introducing Senate Bill 856, Senator Joseph Addabbo (D- Queens) is spearheading New York’s latest push towards iGaming regulation. In case you didn’t know, this isn’t Senator Addabbo’s first run at legalizing online casino activity in the state. His previous efforts in 2023 were unsuccessful.

Should this measure sail through legislative chambers and receive Governor Kathy Hochul’s approval, interactive slot machines and table games will be the headliner games of online casinos in New York. The bill also seeks to legalize online lottery games and permit purchasing Powerball and Mega Tickets via online platforms.

Senator Addabbo’s initiative is geared towards expanding the capacity of iGaming in a state that is already doing exemplarily well in mobile sports betting. Some New York experts project that this move could bring over $1 billion worth of revenue to the state, which could ease its budgetary shortfalls.

If the bill crosses the finish line to become law, NY will join a coveted group of six other US jurisdictions that have taken the bold step to authorize and regulate online casino platforms. They are Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, and West Virginia. Moreover, Rhodes Island is also set to join the fold in April when online casino gaming is expected to go live.

Evaluating the Contents of Bill 856

The bill, as it currently is, will allow all the commercial casinos within state lines alongside tribal casinos, racinos, and online sportsbooks to apply for iGaming operator privileges. While the state senator’s iGaming bill failed to make it into the state’s budget in 2023, Mr. Addabbo is more hopeful of a positive outcome this time around.

Being the Chair of the Committee on Racing, Gaming, and Wagering, Sen. Addabbo says that the renewed efforts for iGaming regulation also targe the launching of peer-to-peer poker. To that end, Bill 856 also includes language that will pave the way for NY to enter into a multijurisdictional agreement with other US jurisdictions. 

The avenue to include multijurisdictional vocabulary in the bill is seen in many quarters as a vital element to fulfill the promise of a national online gaming regime. Addabbo opines that approval of this bill with the online poker network clause could quickly spur New York into becoming the country’s biggest online casino market. Well, it would be hard to argue with that, seeing how the state took mobile gaming by storm. He said:

What we’re seeing is that mobile sports betting in New York is being perceived as the No. 1 product in the country… We should build upon that. The timing for iGaming is perfect in the sense that we’re showing that New Yorkers have the propensity and the desire to game with a device, as well as going through a brick-and-mortar site, but poker is very popular, so why miss out on that segment? I think that it’s something you have to consider.

The bill imposes a 30.5% tax on any operator who will want to set up shop in the Empire State. Further, operators who wish to promote their brand will be required to pay a license fee of $2 million. Meanwhile, those promoting brands they don’t own will be required to pay the state a $10 million license fee. 

Overall, New York’s iGaming measure allocates 21 slots for online casinos, sportsbook companies, tribe-operated casinos, two already existing video lottery terminal parlors, and independent companies that will have 5% minority ownership. Additionally, the bill has provisions for enforcing measures against problem gambling. $11 million of the revenue from online casino games will be allocated for gambling harm prevention programs. 

Addressing the State’s Budget Shortfall

As we pointed out earlier, one of Senator Addabbo’s primary motivations for establishing online casino gaming in New York is to solve the budget shortfall problem. He believes that the economic and tax benefits generated since the debut of sports betting in New York could easily be eclipsed by iGaming with proper coordination and regulation.

Thomas DiNapoli, New York’s State Comptroller, had estimated that the state budget deficit 2024 will be at $4.3 million and could alarmingly double to $8 million by 2025.

Writing in the City & State op-ed last month, Addabbo pointed out that:

As we prepare to enter a new legislative session with COVID-era funding from the federal government expiring, we face a looming budget deficit of great proportions. At a time of fiscal distress for our state, we cannot continue to allow hundreds of millions of dollars to be funneled into neighboring states or the pockets of disreputable (offshore casino) companies- particularly when those funds could be used to further bolster funding for public schools or other worthy services.

Addabbo’s Neighboring States Argument

Another of Senator Addabbo’s arguments towards iGaming regulation in the Empire State is hinged on neighboring states’ thriving online casino industries. The senator pointed out that the offshore online casino market is thriving. As such, funds that could otherwise be used to improve local affairs are instead going to a few unregulated dealers benefitting at the cost of the Empire State.

Also, neighboring states like New Jersey, Pennsylvania, and Connecticut benefit at New York’s expense, with many New Yorkers wagering on their online casino platforms. So, as these states continue to reap where they did not sow, the Empire State, a leading jurisdiction in so many avenues, is getting left behind when it comes to iGaming.

All eyes will now fall on the legislature with the clock ticking to April when the State’s legislature will pass a budget for the 2025 Fiscal Year. Ideally, Addabbo needs to ensure his bill sails through by that time. Be that as it may, even if that timeline is not met, analysts believe that the passage of the New York iGaming bill is only a matter of when not if.