New York Online Casinos Bill Filed by State Senator Joseph Addabbo

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New York State is making a renewed push for the legalization of online casinos in 2024. They do so via state Senator Joseph Addabbo and his newly introduced Senate Bill S815.

The proposed online casino bill, Senate Bill S8185, mirrors its failed 2023 predecessor in many aspects, but introduces a few critical changes.

Some politicians in the Empire State have seen their booming sports betting market, and decided that taxes from legal online casinos in New York could help fill the state’s upcoming budget deficit.

The bill is also backed by a consortium of the biggest U.S. gambling operators. The Sports Betting Alliance – composed of BetMGM, Fanatics, DraftKings, and FanDuel – has recently started a new ad campaign in support of the bill.

Titled Bet on NY, the four operators began the push with a 30-second YouTube ad and a new website.

Bill Provisions and License Eligibility

Under the proposed legislation, more than a dozen online casino licenses will be made available in New York.

That includes options for existing New York casinos, such as established video lottery terminal (VLT) parlors like MGM Empire City Casino and Resorts World NYC, and those run by New York Tribes. It also includes six potential licenses for any new casinos granted licenses in 2024.

Additionally, New York online sports betting operators will be eligible to expand into online casinos.

A key shift in the 2024 bill is its approach to diversity, equity, and inclusion (DEI). While the 2023 bill required at least 5% minority ownership for certain license applicants, the latest version emphasizes affirmative action programs.

Eligible applicants must demonstrate specific goals for employing minorities, women, and veterans, marking a commitment to broader social responsibility in the gaming industry.

Financial Framework and Tax Implications

Financially, the bill is structured to levy a 30.5% tax on online casino operations, aligning with last year’s proposal. That’s significantly less than the national high 50% tax on operators offering sports betting in the state.

License applicants will be required to pay an upfront fee of $2 million, and external platform operators using an in-state license for branding will need to pay a $10 million fee.

Furthermore, the bill mandates that 0.025% of the tax revenue generated each fiscal year be allocated toward funding employee training in responsible gambling. In what would probably be the nation’s largest online casino market, that is expected to be at least $25 million annually,

Estimates suggest that the legalization of online casinos could bring approximately $1 billion annually in state tax revenue for New York. That’s in addition to around $150 million in one-time license fees from casinos, operators, and independent contractors in the first year of operation.

The bill also includes provisions to expand New York lottery services online, allowing consumers to play joint, multi-jurisdiction, and out-of-state lotteries from desktop or on mobile.

Despite the bill’s comprehensive nature, its passage is not guaranteed. The upcoming expansion of land-based casino operations in downstate New York presents a potential challenge, as regulators may be too focused on that task. However, lawmakers remain optimistic about the bill’s prospects.

They cite the potential for significant economic benefits in a climate where the state is facing a budget deficit, but most citizens oppose raising taxes or making public service cuts.

They also point out that online casinos in New Jersey and Pennsylvania are doing roaring trade, and are leeching dollars that could stay in New York.

If operators can convince New York to legalize online casinos in 2024, it will be a big coup for the gambling business. The progress of legalization has slowed in recent years, with 2023 seeing only Rhode Island online casinos added to the list of six legal states, although their market won’t open until March of this year.

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