New York's iGaming Bill: Economic Game-Changer or a Bust?

A Closer Look at New York's iGaming Legislation Landscape

The conversation around online gambling in New York has been fraught with speculation and anticipation. At the heart of the debate is Senator Joseph Addabbo Jr.'s proposed iGaming bill, which, to the surprise of many, was conspicuously absent from Governor Kathy Hochul's 2025 budget plan. This exclusion raises questions about the future of online gambling in the Empire State and the potential economic ramifications.

Understanding the Proposed iGaming Bill

Senator Addabbo's bill is ambitious, suggesting a 30.5% tax on online casino revenue. Such a rate is significant, though it falls short of the precedent set by online sports betting, which was included in the state's 2022 budget with a hefty 51% tax rate. The rationale behind the proposed iGaming legislation is clear: legalizing online casinos could provide a substantial boost to state profits, potentially alleviating budget shortfalls that plague many areas of governance.

However, without the inclusion of iGaming in the state budget, New York stands to lose out on a lucrative revenue stream. As neighboring states and illegal operations continue to thrive, there's a tangible risk of money slipping through New York's fingers, funds that could otherwise be funneled into public services such as education.

Governor's Stance and Legislative Support

While the bill itself presents a promising opportunity for economic growth, Governor Hochul's stance remains unclear. Her decision not to include the iGaming bill in the upcoming budget suggests a lack of support, or at least hesitation, regarding the bill's prospects during the 2024 legislative session. This omission does not bode well for proponents of legalized online gambling, casting doubt on the likelihood of the bill's passage in its current form.

Industry Reactions and Lobbyist Insights

Steve Brubaker, an industry lobbyist, has expressed skepticism about the bill's chances. His insights suggest that companies interested in obtaining a license might face the requirement to divest certain interests, a stipulation that could complicate their entry into the market. Moreover, Brubaker hints at changes in the legal language from the previous year, which may have been manipulated to benefit specific industry players—a common practice in legislation where lobbyists often play a pivotal role in shaping the outcome to favor particular companies.

Brubaker's comments reflect a broader sentiment within the industry: the belief that bills are frequently crafted to legislate market share, thereby influencing the competitive landscape. This perspective underscores the complex interplay between lawmakers, lobbyists, and industry stakeholders in the realm of gaming legislation.

Legislation Tactics and Market Control

The concern over legislating market share extends to the control of live dealer games—an area that Brubaker finds particularly contentious. He predicts that while the iGaming bill may struggle to pass in its current state, amendments could alter its trajectory, igniting a battle for dominance in this niche segment of the market.

Brubaker's remarks, "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," allude to the influence that certain entities may wield over the legislative process. The implication is that companies like Evolution Gaming, a leading provider of live dealer games, could stand to gain from tailored legislative language.

The Future of iGaming in New York

The uncertainty surrounding the iGaming bill casts a long shadow over the future of online gambling in New York. With significant economic implications at stake, the outcome of this legislative endeavor will undoubtedly have a profound impact on the state's economy and the gaming industry at large.

Senators Addabbo and Representative Pretlow have made their position clear, emphasizing the need to capture funds currently lost to other states or illicit operations: "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."

As the 2024 legislative session approaches, all eyes will be on Albany to see whether lawmakers can strike a balance between regulation, economic benefit, and the interests of various stakeholders. The path forward for iGaming in New York remains uncertain, but the dialogue continues, with the potential for significant economic rewards hanging in the balance.