As expected, New York Sen. Joseph P. Addabbo Jr. (D-15) has introduced an iGaming bill to prepare for potential legalization discussions during the state’s upcoming budgetary season.
The bill, S4856, legalizes online casino gaming, including slots, table games, and live dealer games. The bill includes a 30.5% iGaming tax rate. Most states average between 15% to 18% for their iGaming tax rates.
It’s the same bill Addabbo Jr. introduced during last year’s legislative session in the Empire State. Gov. Kathy Hochul (D) did not include iGaming revenues in her state budget and the bill did not move forward.
Millions in Potential Revenue
Addabbo Jr., speaking with Sports Betting Dime earlier this year, revealed that there is a predicted $9 billion shortfall in the upcoming budget. With no federal help on the way, iGaming could help to bridge that shortfall.
New Jersey, Pennsylvania, and Connecticut currently have robust and successful iGaming programs, Addabbo said, and New York is losing revenue over its borders as people flock to those states to participate.
The fiscal estimates included in the bill note that New York State could receive approximately $475 million annually in state tax revenue based upon conservative market estimates. Additionally, during its first year of operation, New York would receive approximately $150 million in onetime license fees from casinos, operators and independent contractors seeking to conduct online interactive casino gaming.
While the conservative fiscal estimates show only $475 million for the state in a year, Addabbo previously said it would not be unreasonable to eventually see over $1 billion in iGaming tax revenue for the state.
“I’m not typically into projections, but it’s not unreasonable to think we could reach $1 billion in iGaming revenue given that in one year we did over $800 million in mobile sports betting revenue. The population that does iGaming is certainly much greater than mobile sports betting. One billion or more in revenue for New York is certainly conceivable,” Addabbo said.
New York reported more than $860 million in sports betting tax revenue for 2023.
For any chance at approval, Addabbo’s bill and iGaming revenue will have to be included in Gov. Hochul’s state budget, which is typically previewed by the governor in February or early March and approved sometime around May.
Competitive Bidding Process
Three iGaming licenses will be available if the bill is passed. The licenses will be awarded much like the state gaming commission awarded the online sports betting licenses several years ago; through a competitive bidding process.
Any approved casino or iGaming operator will be required to pay a one-time fee of $2 million for a license.
The New York State Gaming Commission will regulate iGaming. Like the online sports betting license awards, the gaming commission will accept bids for the three iGaming licenses and award the documents after the competitive bidding process is complete.
An interesting limitation in the bill will prohibit operators who knowingly participate in unregulated or offshore markets from being eligible for a New York iGaming license.
Additionally, if any licensed operator is found to be participating or accepting revenue from unregulated or offshore iGaming markets, the New York State Gaming Commission reserves the right to revoke their awarded license.