Online Gambling Legislation Hits a Snag in New York
In the latest development from the Empire State, Senator Joseph Addabbo Jr.'s ambitious iGaming bill, known as Senate Bill S4856, which seeks to legalize online casino gambling across New York, was conspicuously absent from Governor Kathy Hochul's budget for the year 2025. The proposed legislation, which would implement a tax rate of 30.5% on online casino revenue, failed to make it into the governor's financial blueprint, unveiled on January 16th.
This notable exclusion has sparked speculation that Governor Hochul may not be inclined to endorse the bill during the ongoing 2024 legislative session. This move—or lack thereof—comes as a surprise to some, considering the successful inclusion of online sports betting in former Governor Andrew Cuomo's 2022 budget, which came with a hefty 51% tax on revenues.
The Case for iGaming in New York
The push for legalized iGaming in New York is driven by a belief among operators that such a move could significantly enhance the profitability of their operations within the state. Moreover, proponents like Sen. Addabbo and Assemblyman Gary Pretlow have been vocal about the potential financial benefits for New York's economy, particularly in addressing the post-Covid budget shortfall. They argue that without the legalization of online casino gambling, New York risks losing hundreds of millions of dollars to neighboring states or illegal entities.
In a joint statement, Sen. Addabbo and Rep. Pretlow expressed their concern over the missed opportunity: "At a time of fiscal distress for our state, we cannot continue to allow hundreds of millions of dollars to be funneled into neighboring states or into the pockets of disreputable companies—particularly when those funds could be used to further bolster funding for public schools or other worthy services."
Industry Reactions and Speculations
Steve Brubaker, an industry lobbyist, weighed in on the potential implications of the bill's passage, which now seems uncertain. He noted that should the bill eventually pass—which he doubts—companies implicated would need to divest certain business interests before applying for a license. His comments also shed light on the behind-the-scenes maneuvering, suggesting that last year's legal language might have been amended to favor certain players in the industry, such as Evolution Gaming or the casinos utilizing their services.
"Seems like a very light touch for Evolution. Has me thinking that last year’s L&W language was replaced with more favorable language by Evo or by the casino companies who use them," Brubaker mused.
He also pointed out the commonplace nature of legislation that appears to carve out market share for specific entities, attributing this to the core reason why lobbyists exist. "You see bills ‘legislating market share’ all the time. It is the primary reason lobbyists exist," he explained.
Brubaker's skepticism about the bill's chances extends to the legislative process itself, where amendments often alter the course of a bill significantly. "While I do not see this bill passing, it will be interesting to see amendments that may be added to change the direction or focus of what is a battle for control of live dealer," he predicted.
The Path Forward
The future of online gambling in New York remains uncertain. With the omission of the iGaming bill from Governor Hochul's budget, stakeholders are left to ponder the next steps. Will the legislature forge ahead without the governor's overt support, or will the bill be shelved in favor of other priorities? As the debate continues, one thing is clear: the outcome will have significant ramifications for the state's gaming industry and its contribution to New York's economic recovery post-pandemic.
As the legislative session progresses, all eyes will be on Albany to see if lawmakers can reconcile the competing interests at play and find a path forward for iGaming in New York. Whether through amendments or a renewed push for inclusion in the state budget, supporters of online casino gambling will likely continue their efforts to bring this potentially lucrative industry into the legal fold.