New York netted over $700 million in state revenue from mobile sports betting in 2022. New York Sen. Joe Addabbo believes legal online casinos would have nearly doubled the state’s haul.
That’s according to a bill (S4856) filed by the state’s Senate Racing, Gaming & Wagering Committee chair Wednesday that would legalize online casinos through what could be as many as 20 apps. Fiscal estimates attached to the bill say legal online casinos through state-approved operators would generate approximately $475 million in new tax revenue every year.
An additional $150 million would come from one-time license fees on commercial casinos, mobile sports betting operators, horse racing tracks, and up to three competitively-bid operators that enter the market. iGaming apps would also be available to Native American tribes that have a tribal-state gaming compact with New York.
For bettors, the expansion into iGaming would mean anytime-anywhere wagering on digital slots and table games – plus potentially better odds and bonuses from mobile sports betting operators that could turn increased profits into better betting options.
FanDuel and DraftKings told lawmakers on Jan. 31 that New York’s 51 percent tax rate on mobile sports bets is hurting the state’s gambling industry. A tax rate more in line with Pennsylvania’s 36 percent would mean more growth in the long run, they said.
Online casinos would be taxed at a rate of 30.5 percent under Addabbo’s bill.
Online Casinos in Context of NY Mobile Sports Betting
What Addabbo’s online casino bill would not do is expand the number of mobile sports betting operators in New York.
The number of operators currently licensed stands at nine – all taxed at the 51 percent rate.
Addabbo suggested at the Jan. 31 hearing that lawmakers consider lowering that rate this year after testimony from FanDuel and DraftKings. He has filed a separate bill (S1962) this year that would tie a reduction in the tax rate to an increase in the number of operators.
Under that bill, New York would be required to have at least 14 licensed mobile sports betting operators with a corresponding tax rate of 35 percent by Jan. 2024. By Jan. 2025, the number of operators would increase to 16 with a corresponding tax rate of 25 percent.
Addabbo said at the hearing that any reduction in the 51 percent rate would have to make fiscal sense to the state.
FanDuel President Christian Genetski told Addabbo at the Jan. 31 hearing that more competition would be welcome under Addabbo’s proposal. “We’re here ironically preaching that we want added competition — we think that’s good for users and it’s good for growing the New York market,” he said.
Assembly Online Casino Bill Also Pending in New York
Assembly Racing and Gaming Chair J. Gary Pretlow is also working to bring legal online casinos to New York. The Mt. Vernon Democrat filed his online casino bill in early Feb. That bill (A3634) was referred to committee on Feb. 3.
Pretlow proposes a different structure for online casinos than Addabbo. Commercial casinos (New York has four, with three downstate casinos on the way) or a Native American tribe would be eligible to operate up to two online casino apps each. Wagers would be taxed at 25 percent.
Gov. Hochul’s Support Uncertain — For Now
Both Addabbo and Pretlow appear ready to work with NY Gov. Kathy Hochul to legalize online casinos as part of the state’s one-year budget process this spring.
It’s not certain, however, that online casino language will make it into the 2024 state budget negotiated in Albany over the coming weeks.
New York would be the seventh state to legalize online casinos should the two lawmakers be successful. Of the states that have legal online casinos now, three are New York’s neighbors of New Jersey, Connecticut, and Pennsylvania. Online casino revenue in New Jersey and Pennsylvania topped $1 billion in 2021 alone, according to S4856.