State of iGaming Legislation in New York
In a surprising move, Senator Joseph Addabbo Jr.'s proposed iGaming bill has been omitted from Governor Kathy Hochul's budget for the year 2025. The bill, which seeks to impose a 30.5% tax on online casino revenue, is facing an uncertain future as it appears Governor Hochul may not back the legislation during the 2024 session.
The absence of the iGaming bill from the budget comes despite the inclusion of online sports betting in the 2022 budget, which was set at a significantly higher tax rate of 51%. This has raised questions about the state's approach to online gambling and its potential revenue streams.
Economic Implications
Supporters of the iGaming bill argue that legalizing online casinos could be a financial boon for New York, helping to alleviate budget deficits. They point out that without the legalization of iGaming, New York stands to lose considerable revenue to neighboring states where such activities are legal, or worse, to illegal operations that offer no consumer protections or tax benefits.
However, industry lobbyist Steve Brubaker expresses skepticism regarding the bill's chances of passing. He notes that companies interested in obtaining a license might need to divest certain interests, a stipulation that could complicate the application process.
There is also concern that amendments made to last year's legal language could have been manipulated to favor specific industry players, indicating that lobbyists often play a significant role in shaping legislation to benefit particular companies. These changes could have long-term implications for the structure and competitiveness of the industry.
Lobbyist Insights
Brubaker's comments shed light on the intricacies of legislative processes within the gaming industry. "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," stated Sen. Addabbo and Rep. Pretlow, highlighting the urgency of the matter from a fiscal perspective.
Brubaker himself alludes to the possibility that the previous year's legal terms were altered to give an advantage to certain entities. "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," he remarked, suggesting potential preferential treatment for certain companies, such as live dealer providers like Evolution Gaming.
He goes on to explain the broader context of such legislative efforts: "You see bills ‘legislating market share’ all the time. It is the primary reason lobbyists exist." This candid admission confirms the widespread belief that lobbyists are instrumental in directing the flow of market advantages through legislative channels.
Despite his reservations about the bill's success, Brubaker acknowledges the dynamic nature of the debate surrounding it: "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."
Uncertain Future for Online Gambling in New York
The ongoing discussion around the iGaming bill underscores the complex and often contentious relationship between legislators, industry stakeholders, and lobbyists. With the future of online gambling in New York hanging in the balance, the outcome of this legislative effort will undoubtedly have a profound impact on the state's economy and the gaming industry as a whole.
As the 2024 legislative session approaches, all eyes will be on Governor Hochul and the New York State Legislature to see if they will move forward with the iGaming bill or let the opportunity for additional revenue—and the potential to curb illegal gambling activities—slip away. The decision will be a critical one, not only for the coffers of New York State but for the many constituents who stand to benefit from the increased funding for public services that legalized iGaming could provide.