New York state Sen. Joseph Addabbo introduced on Wednesday bill S4856, which seeks to legalize online casino gaming, including slots, table games, and live dealer games. The bill includes a 30.5% iGaming tax rate. Most states average 15% to 18% for their iGaming tax rates.
Despite the bill’s introduction, it faces an uphill battle for passage. Gov. Kathy Hochul (D) did not include iGaming provisions or plans in her recent executive budget proposal for Fiscal Year 2024.
In her budget proposal, Hochul suggested using downstate casino license fees and tax revenue, already earmarked for education, to fund the MTA in 2026. However, Addabbo said iGaming revenue could be used to fund the MTA much sooner than 2026.
Gov. Kathy Hochul (D)
According to the rules, the following entities would be allowed to legally offer online casino wagering in New York: the four downstate casinos and three forthcoming upstate casinos; VLT parlors MGM Empire City Casino and Resorts World NYC; New York tribes; online sports betting operators; and three independent applicants with a minimum of 5% minority ownership.
This could result in 21 operators, each of whom must pay a one-time fee of $2 million to be granted a license. If a licensee is to permit another entity, such as an online operator, to utilize their license to advertise their brand, the online operator would need to pay an additional $10 million.
The proposed legislation would permit slots, table games, online poker, and live dealer studios to be offered, although there would be some restrictions on the live dealer setup. Additionally, any operator must agree to “produce an affidavit stating it shall enter into a labor peace agreement with labor organizations that are actively engaged in representing or attempting to represent gaming or hospitality industry workers.”
The state would receive $11 million annually from taxes dedicated to problem gambling funding. In addition, when a lifetime total of $2,500 has been deposited, the individual will be presented with responsible gambling messaging. Additionally, individuals will only be able to deposit up to $2,500 a year via a credit card.
At last month’s hearing on New York online sports betting, Spectrum Gaming Group offered evidence that online casinos in the state could bring in up to $4.3 billion annually in revenue by year five. This would mean approximately $1 billion yearly in taxes for the state and additional funds to assist with the treatment of problem gambling and gambling addiction.
While this is a lot of legal gambling expansion talk for one state, New York interests the online gambling industry because it became the No.1 revenue-generating state in its first year of online sports betting. From Jan. 8, 2022, to Jan. 8, 2023, Gov. Hochul said New York received $909 million in tax revenue and license fees from mobile sportsbooks.