iGaming: Coming Soon To New York? Senator Proposes New Bill

The road to online casino games in New York started this week, as Sen. Joseph P. Addabbo’s iGaming bill, S4856, entered a Senate committee on Feb. 15.

Details of S4856

If passed, the bill would legalize online slots, table games, and live dealer games. Poker is not included in this bill, as Assemblyman Gary J. Pretlow introduced a separate online poker bill – A01380 – in January.

Casinos, sports betting licensees, tribes, and racinos are eligible to receive one online skin each; three additional licenses can be issued by the state, pending a competitive bidding process. A license fee costs $2 million for a 10-year term.

The most significant part of this bill is the 30.5% tax rate, which is over 20% lower than the tax rate on sports betting in the state.

The legislative summary for this bill read: “New York State would receive approximately $475 million annually in State tax revenue based upon conservative market estimates. In addition, in the first year of operation, New York would receive approximately $150 million in one time license fees from casinos, operators and independent contractors seeking to conduct online interactive casino gaming.”

In a joint public hearing on Jan. 31, Spectrum Gaming Group projected the iGaming market could generate between $2.3 billion and $3.1 billion in gross gaming revenue in the first year. By year five, they predict gross gaming revenues to increase to between $3.6 billion and $4.4 billion.

Sportsbooks Weigh In

While the nine sports betting operators in the state have yet to comment on the new iGaming legislation, FanDuel and DraftKings leadership spoke about it last month at the Jan. 31 joint public hearing.

“It is time to look past the rhetoric and focus on how legalizing iGaming can fund crucial state services in New York” DraftKings CEO Jason Robins wrote in a written testimony.

Currently, FanDuel CEO Chiristian Genetski, along with Robins, are leading an effort to lower the sports wagering tax rate in New York from a staggering 51%.

Probability of Success

Currently, Gov. Kathy Hochul’s executive budget proposal for FY2024 does not include iGaming, which Addabbo acknowledged wasn’t ideal for the bill.

However, they are “still in the early innings of the budget process, and it’s likely that the more they look at it, the more the legislature will find iGaming revenue to be an attractive alternative,” Howard Glaser, Global Head of Government Affairs and Legislative Counsel at Light & Wonder told Legal Sports Report. “And the thousands of jobs produced by iGaming live dealer — which under the bill would be union jobs — will give a further boost to prospects.”

Addabbo said that every year that New York forgoes the legalization of iGaming in the state, they lose $4 billion.

Lawmakers have until June 8, the end of the New York legislative session, to work through the kinks and get this legalized. After that, licenses would be awarded immediately and could go live when regulations are published, which must be within 120 days.