A Closer Look at New York's iGaming Legislation
As the Empire State grapples with its financial strategy, the spotlight turns to the realm of internet gaming—a sector that could potentially inject much-needed revenue into New York's coffers. However, the latest developments in state politics suggest a rocky road ahead for proponents of online gambling expansion.
The Absence of iGaming in the 2025 Budget
Senator Joseph Addabbo Jr.'s ambitious iGaming bill has hit a significant snag, failing to secure a spot in Governor Kathy Hochul's 2025 budget proposal. The bill, which seeks to legalize and regulate online casino games, comes with a proposed tax rate of 30.5% on the industry's revenue—a figure that sits notably lower than the hefty 51% tax applied to online sports betting revenues included in the state's 2022 budget.
Despite the potential financial benefits, Governor Hochul appears hesitant to throw her support behind the bill during the 2024 legislative session. This reluctance could stem from various factors, including political considerations or concerns about the social implications of expanded gambling access.
Potential Benefits and Risks of iGaming
Advocates for iGaming legislation argue that legalizing online casinos could be a windfall for New York, providing a substantial source of revenue to address budget shortfalls. Without legal iGaming options, they warn that New York risks losing out to neighboring states where such activities are legal or to the shadowy world of illegal gambling operations.
Sen. Addabbo and Rep. Pretlow have been vocal about the missed opportunities, stating, "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 Dynamics and Lobbying
The iGaming bill is not without its detractors within the industry itself. Steve Brubaker, an industry lobbyist, has expressed skepticism about the bill's chances of passing. He suggests that last year's legislative language may have been altered to cater to specific interests within the industry. "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 remarked.
Lobbyists' influence on legislation is no secret, as Brubaker points out: "You see bills ‘legislating market share’ all the time. It is the primary reason lobbyists exist." His comments shed light on the often opaque process through which laws are crafted and the power certain entities may wield in shaping legislation that serves their interests.
Furthermore, Brubaker anticipates that if the bill does move forward, it might undergo amendments that could shift the balance of power within the live dealer segment of the industry. "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 noted.
Regulatory Considerations
Another aspect of the bill that companies must consider is the possibility of having to divest certain interests before applying for a license. Such regulatory hurdles could discourage some operators from entering the market or significantly alter their business strategies to comply with state requirements.
The Uncertain Future of Online Gambling in New York
The ongoing debate over iGaming in New York underscores the complex interplay between economic incentives, political will, and industry lobbying. With the outcome of the iGaming bill poised to have a significant impact on both the state's economy and the gaming industry, stakeholders from all sides are watching closely.
The future of online gambling in New York remains uncertain, but what is clear is the considerable potential for state revenue and the intense competition among industry players to shape the market to their advantage. As the legislative session unfolds, all eyes will be on Albany to see whether New York takes a gamble on the lucrative world of iGaming.