In Feb. 2023, Sen. Joe Addabbo filed State Bill 4856 to accommodate online sports betting within the purview of legalized betting activities in the Empire State. However, the bill failed to gain traction with fellow lawmakers and fell short of the expected mark. With New York staring at a $4.3 million deficit in its budget in 2024, Senator Addabbo hopes his fellow lawmakers will now see the bill in a different light, as legalized sports betting offers tremendous earning potential for the state.
According to Addabbo, legal iGaming in the state would add another $475 million to the state’s revenue, in addition to the $650 million (as of 2023) that it receives from retail sports betting. Additionally, Senator Addabbo has stated that New York will be able to make an additional $150 million in the form of licensing and operating fees.
Speaking on the development, Addabbo 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 it’s something that you have to consider.”
New Tax Rate Proposed for NY Online Casino Operators
Senator Addabbo’s version of the bill puts forth a significant 30.5% tax rate on online casino operators, in addition to a $2 million licensing fee for operators who choose to provide services under their own brand. If operators choose to promote a brand other than their own within the state, the licensing fee is raised to a significant $10 million.
The bill accommodates up to 21 iGaming operators and also covers the brick-and-mortar casinos that currently operate in the Empire State, in addition to online sportsbooks, New York tribes, pre-existing video lottery terminal parlors, and independent companies with partial minority ownership. Lastly, SB4856 requires the adoption of an established problem gambling program.
In December, Addabbo argued that the amount of illegal and unregulated online casino gaming taking place in the Empire State is causing problems on multiple levels. One, it has a tendency to cause unchecked problem gambling, as illegal operators do not work with problem gambling programs, and two, vast amounts of money are being wagered with no fee being paid for licensing or tax being collected by the state. The issue is further compounded by states like New Jersey, Pennsylvania, and Connecticut all being accessible to New York gamers, who are spending their tax money without their home state being able to take a cut.
Addabbo also said that the introduction of peer-to-peer online poker in New York holds the potential for a multi-jurisdiction agreement with neighboring states like New Jersey that could bring in additional revenue. While this year’s arguments are more robust than the last, and the odds seem to be in Addabbo’s favor, legalization remains an uphill battle for the Empire State.
New York Collected $861 Million From Online Sports Betting in 2023
In the final week of 2023, the New York State Gaming Commission revealed that the state had collected over $1.69 billion in gross gaming revenue for the year. Bettors had placed wagers worth over $19 billion in the 12-month period, resulting in $861 million being collected in tax on online sports betting revenue. This figure indicates an increase of over $169 million over the previous year.
The handle for 2023 comes in at a substantial $19,103,521,573. Of all the sportsbooks operating in the state, FanDuel topped the charts by earning $196.8 million in online sports betting handles, while DraftKings came in a close second place with $167.9 million in handles. Sports betting revenues have boomed since the state launched its first nine sportsbooks on Jan. 8, 2022. FanDuel is the only operator to have exceeded $14 billion so far. Here is a breakdown of the revenue earned by each of the state’s sportsbooks to date:
- FanDuel: $14,316,011,830
- DraftKings: $11,314,417,878
- Caesars: $4,929,865,390
- BetMGM: $2,581,353,215
- BetRivers: $1,027,451,252
- PointsBet: $742,310,796
- WynnBET: $207,687,593
- Resorts World: $129,740,573
- Bally Bet: $27,245,972
Senator Addabbo argued that iGaming is more than likely to mirror the growth of online sports betting in the state, holding the potential to bring in some crucial revenue — revenue that is currently being lost to neighboring states and illegal operators. While the duopoly of FanDuel and DraftKings looks set to continue for the foreseeable future, the introduction of new sportsbooks to the state will bring in some much-needed competition.
The New York State Gaming Commission recently approved transferring PointsBet’s operator license to Fanatics Betting and Gaming, paving the way for the first new sports betting operator in the Empire State since Jan. 2022.