New York Bill Would Legalize Online Casinos

New York is going for a bigger bite of the internet gaming apple, and this time it’s focused on online casinos. 

Senate Racing, Gaming, and Wagering Chair Joe Addabbo, D-Queens, is sponsoring Senate Bill S8412 to allow New York casinos, New York State tribal nations, and their independent contractors to operate online casino slots and table games in New York. 

The bill was referred to Addabbo’s committee yesterday and could come to a vote within weeks. 

“If (S8412 is) authorized, New York would quickly become the national leader in online casino gaming, generating hundreds of millions of dollars in tax revenue annually for the State as it continues to recover from the economic downturn caused by the COVID-19 pandemic,” a summary attached to the legislation reads.

“It’s a starting point,” Addabbo told NY Sports Day.

But don’t underestimate his words. The Senator is serious about passing the bill this session. Without it, Addabbo said, New York will continue to lose hundreds of millions of dollars to illegal online operators. Unregulated online gaming operators pay nothing to the state or gambling addiction programs, he said. S8412 would put a minimum of $11 million of state revenue toward addiction programs every year.

“It’s now illegal,” he said. “Regulation will put (some of that money) toward addiction treatment.”

New York online casinos are expected to net about $475 million in annual tax revenue for New York State under the proposal. An additional $150 million in one-time license fees are also possible, states the bill. 

More than $70 million in state revenue has been created in the past month with the launch of mobile sports betting in New York on Jan. 8. The state has quickly become the top-grossing mobile sportsbook market in the country, with $1.6 billion wagered online by the end of January.

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When Could New York Online Casinos Launch?

Addabbo’s proposal would become law in 2022 should it make it through the New York State Legislature and past the desk of Gov. Kathy Hochul. The legislature has until the end of June this year to get the bill to Hochul’s desk.

The regulatory process, however, could take much longer — pushing a proposed New York online casino launch into late 2022, at the earliest. The later the launch, the more New York could find itself at a disadvantage in the online casino market.

Still, New York’s commanding performance in its first month in the mobile sportsbook market offers some reassurance that the state could do well with online casinos, too, despite any concerns with market saturation in neighboring New Jersey and Pennsylvania.

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How Would New York Online Casinos Operate Under S8412?

Both commercial casinos and tribal nations would be allowed to operate online casino games in New York State under Addabbo’s bill. The licensing fee would be $2 million per operator for 10 years. Operators could then partner with up to two mobile casino platforms and their brands such as Caesars or FanDuel, with each platform required to pay $10 million for a 10-year license.

The tribes would be included by partnering with commercial casinos, at the tribe’s request. Once approved, a tribe could accept bets through servers based at casinos licensed and regulated by the New York State Gaming Commission.

The bill states: “As a condition of registration as an operator, each casino shall agree, upon request of an Indian tribe that has not entered into an agreement for mobile interactive gaming wagering with another casino, to provide a site for a mobile interactive gaming wagering server and related equipment for such Indian tribe as directed by the (New York State Gaming Commission), at no cost to such Indian tribe except the direct and actual cost of hosting the serve or other equipment such by such Indian tribe.” 

Online casino betting, like statewide mobile sports betting in New York, has to be handled by licensed commercial casinos under New York’s constitution. There are now four commercial casinos in New York, with three others authorized by law. Those are expected to be built downstate, with the bidding process possibly starting this year.

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