Hope Not Lost Yet For NY Online Casino Legalization As Executive Budget A ‘Starting Point’

Written By Grant Lucas on January 18, 2024
Senator Joe Addabbo faces Statue of Liberty for a story on a bill to legalize online casinos in New York

If Sen. Joe Addabbo were honest, he likely didn’t expect Gov. Kathy Hochul to include legal online casinos in her recent New York Executive Budget.

Of course, he would have been thrilled to see her integrate potential revenue from online casinos in NY within her vision for the future of the Empire State, which faces a $4.3 billion deficit. That would have certainly made the road a little smoother for potential legislative passage.

In reality, Addabbo knew his latest proposal to legalize online casinos in New York was simply “a starting point.” That was his intention.

“The imperfections that exist in it, it provides for a conversation, a good starting point,” Addabbo told PlayNY.

“I like the bill a lot and hopeful that it forms the foundation of which we can start a conversation during the budget process.”

NY Executive Budget, like the online casino bill, just a starting point

Earlier this week, Hochul presented her Executive Budget to the state — a massive and record-setting $233 billion plan to help New York begin to dig out of a $4 billion hole it finds itself in to begin the new year.

But just because Hochul did not include NY online casinos within that plan does not necessarily mean legalization isn’t at all possible. Like Addabbo’s online casino bill, which would also authorize internet lottery and online poker in New York, the Executive Budget is a start.

Lawmakers now have until April to review, tweak, finalize and approve that plan.

“The Executive Budget, the good governor laid out her blueprint of where she wants the state to go. Now we start to figure out the pieces,” Addabbo said. “It’s not so much a question of WHAT she wants to do. It’s a question of HOW we do it, how we get there. And that’s where iGaming and iLottery can be a part of that how.”

Because, as Addabbo explained, addressing budgetary issues should not only consider short-term fixes but long-term solutions.

“Budget deficits only grow, according to our state comptroller,” Addabbo continued. “So we’re looking for a sustainable plan. Not one-shots. Not gimmicks. But sustainable short-term and long-term plans, and I think that’s what we’re looking at with iGaming and iLottery.

“You’re building upon a strong foundation with mobile sports betting, and that has certainly done great work over the last two years. This is the gameplan for going forward addressing the budget issues now AND in the future. I think we shouldn’t be short-sighted and look just to this year. We need to plan ahead for the out years — next year and outward — for the fiscal situation that lays ahead as well.”

A few noteworthy details from Addabbo’s bill

Late last week, just a few days before Hochul presented her budget, Addabbo filed the long-promised and new proposal to legalize online casinos in New York.

Among the details, NY online casinos would pay a 30.5% tax rate to the state, which would also charge operators $2 million for licenses ($10 million for independent operators). All told, New York could divvy up 31 licenses to land-based casinos in the state — commercial and tribal — as well as to VLT racinos, the nine online sportsbooks and three out-of-state bidders.

For months, Addabbo has emphasized the billions of dollars lost to neighboring states with legal online casinos as well as to platforms operating illegally within New York. Analysts have informed him that New York stands to make “about a billion dollars” in revenue from legal online casinos in NY.

But it’s about much more than what the state could realize from iGaming, internet lottery and online poker. It’s about what New York could do to provide assistance to individuals who may need help with problem gambling.

This is where Addabbo finds a bit more optimism for potential passage.

Hochul’s budget carves out nearly $5 billion for mental health

Among the chief priorities highlighted by Hochul’s budget: rebuilding New York’s mental health system, which as been “underfunded for decades,” according to the governor’s plan. She would like to raise the state’s investment to $4.8 billion as a way to continue “expanding access to mental health services.”

How does this relate to Addabbo? Talk to him for only a few minutes and you’ll hear about one of the biggest reasons he wants to legalize NY online casinos.

“Regardless of the fiscal situation of our state, the other aspect I’d really like to address and we’re not by not doing iGaming and iLottery is the addiction part,” Addabbo told PlayNY.

“We have an opportunity to help New Yorkers who are currently doing this illegally, and we can help them with their addiction or on their road to addiction by regulating iGaming and iLottery now in New York. It’s the fiscal aspect but also the opportunity to help a New Yorker.”

Addabbo’s bill calls for $11 million to go toward problem gambling education and treatment each year. In addition, each fiscal year, the New York State Gaming Commission will set aside “one-quarter of one-tenth of one percent” of tax payments to fund employee and responsible gambling training and education, health and development. It doesn’t sound like a lot when phrased in such a way. Which is why Addabbo included this kicker:

“Provided however, that the amount budgeted for such a program shall be no less than twenty-five million dollars for each fiscal year.”

Addabbo: Now is the time to legalize online casinos

The season has begun for budget negotiations, what many in Albany refer to as the “budget dance.”

New York has a chance to build upon a New York sports betting industry that has generated over $1.5 billion for the state in just two years.

Wait any longer, and the Empire State may lose out on even more revenue already funnelling to other states and the illegal market while New York stares down a $4.3 billion deficit. Worse, Addabbo argues, New Yorkers who suffer from problem gambling and addiction won’t receive the proper help.

“I’m ready. I’m hopeful that the Hochul administration is ready to have these conversations,” Addabbo said. “And this is the perfect time to do it, during the budget process.

“Every moment I have, I will start talking about it. But I need others to talk about it as well. It can’t be one singular legislator that talks about it. It’s a collective effort. … I’m hoping that this collective effort starts to collect itself and start putting the pieces of that puzzle together. Starting now.”

Photo by PlayNY
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Grant Lucas

Grant Lucas is the managing editor for PlayNY. A longtime, award-winning sports writer, Grant has covered gambling and legal sports betting since 2018, when he got his start reporting on the New Jersey and Pennsylvania industries. He now oversees PlayNY as New York expands legalized gambling to sports betting and online casino gaming.

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