NY Online Casinos Becoming More Of A Reality, Thanks In Part To New Jersey

Written By Grant Lucas on November 22, 2023
a door opening to a hand holding a phone with an online casino

Ten years ago, Chris Christie, then governor of New Jersey signed legislation that would alter the course of legalized gambling across the country. On Feb. 26, 2013, Christie put pen to paper on Senate Bill 1565 that paved the way for the first online casinos to launch in the state exactly nine months later.

Here in New York, Sen. Joe Addabbo, entering his third term, watched on – envy taking over.

“I was concerned, as we always are, when neighboring states do something that we don’t do,” Addabbo told PlayNY. “It usually means a loss of money or a loss of jobs or a missed opportunity. And I hate missing a golden opportunity.”

He added:

“I was certainly jealous of the fact that they were doing stuff that we should have done in New York.”

Online casinos in New Jersey booming 10 years later

While Delaware and Nevada technically beat it to the punch, New Jersey quickly established itself as the gold standard for legal online casinos, which went fully live in the Garden State on Nov. 26, 2013.

Since then, online casino gaming in New Jersey has generated over $7 billion in total revenue, resulting in more than $1 billion in state tax revenue.

As New Jersey continued to pad its bank account, Addabbo continued seeing his efforts to legalize NY online casinos fall short. And his frustration continued to mount.

“You always think about what other states are doing and why can’t we do it,” Addabbo said. “The reason we couldn’t do it is because we had a governor at that time (Andrew Cuomo) who wanted nothing to do with it. Therein lies the problem. We are perceived now, nationally and globally, as a growing gaming market in New York because of, really, Gov. (Kathy) Hochul’s willingness to at least talk about credible ways of growing gaming in New York. No state can do it unless the state government – the head of which, the governor – will want to do that.”

As Addabbo recalls, Cuomo kept rebuffing legislative efforts as he perceived online casinos as unconstitutional. Meanwhile, New Jersey – and later Pennsylvania – welcomed New Yorkers to their online casino offerings.

“It’s frustrating,” Addabbo said, “watching other states be so successful at it and you know a part of that, a good segment of that, is New Yorkers doing it in that state.”

New Jersey opened door for potential NY online casino legalization

Technology was much different in 2013. The iPhone 5S came out 10 years ago, featuring a 4-inch widescreen display, 1136-by-640-pixel resolution and storage ranging from 16 to 64 gigabytes. A decade later, consumers have access to the iPhone 15 Pro Max and its 6.7-inch all-screen display, 2796-by-1290 pixel resolution and storage ranging from 256 gigabytes to 1 terabyte.

We have seen technology reach points we might not have even imagined in 2013. Legal online gambling has followed a similar trend. Back then, Addabbo said, you only considered brick-and-mortar casinos. Not anymore.

Online casino gaming represents “a whole new population,” Addabbo said. “It’s a whole new arena. It’s a whole new customer base.”

A decade ago, as the reality of New Jersey online casinos set in, some feared iGaming would cut into the bottom line of retail casinos in Atlantic City. Addabbo never worried, however. In 2016, three years into NJ online casino gaming, Atlantic City casinos totaled $2.6 billion in total revenue with five months going over $200 million. This year, through October, AC casinos stand at $2.4 billion with all 10 months exceeding the $200 million mark.

“For those people who say to me, ‘We’ve got to be careful about iGaming in New York; it’s going to cannibalize brick-and-mortar,’ no it will not,” Addabbo said. “We can have legislative language that I’m already working on in the draft that will provide and protect the jobs at brick-and-mortar and actually improve jobs at brick-and-mortar and still have the growth of iGaming.”

New York surrounded by online casinos

In the 10 years since New Jersey launched online casinos, other states have gotten in on the action. Of the five states that share a border with New York, three feature iGaming: New Jersey, Pennsylvania and Connecticut. (Also nearby, Delaware, Michigan and West Virginia have online casinos, and Rhode Island expects to launch in spring 2024.)

New York, meanwhile, sits stagnant, save for the launch of online sports betting in January 2022.

“It really becomes problematic,” Addabbo said. “As more states do it and other states like New York get surrounded, you have to do it. I’ve always said in New York, for iGaming, it’s not a question of if but when. It has to happen. How long do you sit back and watch a billion dollars leave the state every year? How much can you take that?

“And with the budget deficit next year, which is hovering around $4.3 billion, you can’t cut your way out of a $4.3 billion deficit. You have to look for revenue. Here’s new revenue in New York, certainly in terms of iGaming and iLottery. Estimates are about a billion dollars. So how the hell are they gonna sit back and not help people with an addiction, not recoup money that you’re already losing, and how long can you sit back?”

Gov. Kathy Hochul said she will not raise taxes to help bridge the gap. Online casinos, Addabbo argues, can lend a massive assist. Especially when you consider the success of online sports betting in NY.

Building NY online casinos on foundation of sports betting success

In less than two years, online sports betting has accepted over $31 billion in bets resulting in $2.7 billion in revenue and nearly $1.4 billion in state tax revenue. New York recently made history as the first state with $2 billion in monthly handle.

That success only inspires Addabbo more to legalize online casinos, if that of New Jersey wasn’t enough. After all, online casino gaming appeals to a much broader customer base than sports betting.

“New York has such a strong foundation from mobile sports betting to build upon,” Addabbo said. He added: “There is such an appetite in New York to do iGaming in New York, based on those solid numbers from mobile sports betting for going on two years. I think we need to build upon that.”

Addabbo emphasized that any attempt to expand legal gambling in New York must favor resources for problem gamblers. The sports betting bill carved out $6 million. His online casino bill, expected to be introduced before the end of the year, calls for $11 million.

“We have to be cognizant and aware of the fact that a bigger population, a more robust population, is going to be using iGaming,” Addabbo said. “The problem gambling addiction issue is at the forefront of whatever we do with iGaming. That will always be a priority.”

It has become an annual tradition for lawmakers to broach the topic of online casino expansion. It’s arguably the closest they have gotten to crossing the finish line. Like it did with sports betting, New York would most assuredly challenge for the top spot in terms of online casino success.

Who knows where New York would be now if not for New Jersey in 2013.

“In 10 years,” Addabbo said, “to me, the picture has certainly changed.”

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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