NY Lawmakers Joseph Addabbo and Gary Pretlow Seek to Authorize iGaming

Posted on: February 19, 2023, 01:46h. 

Last updated on: February 20, 2023, 01:43h.

Steve Bittenbender Read More
Expertise: Legislation, Sports Betting, Horse Racing.

Two New York lawmakers have filed bills that would legalize online casinos, otherwise known as iGaming, across the state.

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New York state Sen. Joseph Addabbo (left) speaks at a Jan. 31 joint hearing regarding the first year of mobile sports betting operations in the state. He and Assemblyman Gary Pretlow (right) have also filed bills to legalize online casino gaming in the state. (Image: NY Senate)

The bills filed by state Sen. Joseph Addabbo, D-Queens, and Assemblyman Gary Pretlow, D-Mount Vernon, are similar to the ones they filed last year.

Addabbo, who chairs the Senate Committee on Racing, Gaming, and Wagering, filed Senate Bill S4856 on Wednesday. Pretlow, who chairs the Assembly Committee on Racing and Wagering, filed Assembly Bill A3634 in that chamber two weeks ago.

Currently, seven states allow online casino gaming. That includes three of New York’s neighbors, Connecticut, New Jersey, and Pennsylvania. The lawmakers point out that Pennsylvania and New Jersey reap about $120 million in taxes from iGaming revenue.

They also point out that New York quickly became the nation’s largest online sports betting market shortly after operators began taking bets there last year.

Similarly, if authorized, New York would quickly become the national leader in online casino gaming, generating hundreds of millions of dollars in tax revenue annually for the State as it continues to recover from the economic downturn caused by the COVID-19 pandemic,” both lawmakers say in their bills’ justification statements.

Both lawmakers estimate the state would receive $475 million in tax revenue during the first year of operation, with that being a “conservative” figure. Both also say one-time licensing fees would net the state another $150 million or so.

Differences on Tax Rate, License Eligibility

While very similar, both lawmakers have a couple of key differences in their bills as they’re currently written.

One difference between the two bills is the tax rate, with Addabbo proposing a 30.5% tax on gross gaming revenue, and Pretlow’s bill calling for a 25% tax.

In addition, Addabbo would allow state-licensed casinos, video lottery terminal operators, tribal nations with valid casino gaming compacts in New York, and mobile sports wagering platform providers to be qualified for licenses.

Pretlow’s bill would allow either state-licensed or tribal casinos operators to offer iGaming, and in addition, each operator could partner with two independent contractors that would be able to market their brand.

Despite the differences in the two bills on what entities would be eligible, both bills state a casino or authorized operator would pay a $2 million license fee, and independent contractors would pay a $10 million license fee.

New York currently has four state-licensed casino resorts, with the possibility of three more being approved within the next year. The state also has Class III tribal gaming compacts with the Oneida Indian Nation, the Saint Regis Mohawk Tribe, and the Seneca Nation of Indians.

The state also has eight sports betting platform providers (and nine sports betting operators), and there are 10 video lottery terminal casinos across New York.

Analysis: Odds Against New York iGaming in ’23

Both Addabbo and Pretlow have touted iGaming as a potential source of new revenue for the state, but the prospects for lawmakers approving online casinos this year seem like a longshot at best.

Two years ago, lawmakers approved a budget that opened the door for mobile sports betting, and last year’s budget included the licenses for three more casinos, which will likely go to downstate locations.

In her budget proposal this year, New York Gov.  Kathy Hochul, a Democrat, did not include any iGaming legislation. Lawmakers can add it to theirs, but it would then require negotiations with the governor’s office to keep it in the final document that’s supposed to pass by April 1.

Online casino gaming will likely come to New York, but it will probably be next year, at the earliest, before it passes. The state is looking at the potential for multi-billion dollar deficits in future budgets, and the money generated by iGaming could help prevent cuts to education programs across the state.

One big question will loom around taxation. This time, operators would likely resist any plan that would set the tax rate at 51%, like sports betting. They may even try to leverage iGaming legalization into negotiating a lower sports betting tax rate, with the promise of larger iGaming revenues offsetting any tax losses on the sports betting side.

The bills are worth keeping an eye on for the rest of the session to see if they build momentum, but it appears Pretlow and Addabbo would need to hit on an inside straight in order for their proposal to pass this year.