When It Comes To Legalizing NY Online Casinos, Lawmakers Don’t Need To Look Far

Written By Chris Imperiale on October 5, 2022 - Last Updated on November 3, 2022
NY Online Casinos Legalization Michigan Pennsylvania (2)

Even though the state of New York is slightly behind the times when it comes to regulated online casino gaming, things are moving in the right direction. The Empire State is already advancing toward three downstate NY casinos thanks to Gov. Kathy Hochul’s new state budget.

The next step is to expand through online gambling. And it appears that topic is in the works for 2023. Hopes are that discussions increase toward the end of 2022 and online casino gaming is on the docket for the governor’s January Executive Budget.

As lawmakers prepare to make this push, there is plenty out there to help. Both neighbors in Michigan and Pennsylvania recently launched their online casino markets and now have lots of helpful information to share.

So, before NY online casinos officially release, take a look at how Michigan and Pennsylvania conducted their business. And how New York could follow in their footsteps.

Understanding challenges around online casino gaming

Several regulators and lawmakers spoke during a panel at the iDEA Growth and GeoComply Power Lunch Summit to discuss the impact of iGaming in their state. Guests represented included Michigan’s executive director of the Michigan Gaming Control Board, Henry Williams, as well as state Sen. Curtis Hertel Jr.

Together, the group talked about the process for getting an iGaming bill off the ground and how to make it as painless as possible. This is a perfect blueprint for lawmakers in NY and supplies lots of vital material on how to succeed.

The group initially discussed a bunch of the challenges that jurisdictions faced when trying to launch online casinos. One of the top potential issues was how the movement of revenue could affect the communities where retail casinos already exist.

In Michigan, places like Detroit were overly concerned that the release of online casino apps would hurt their bottom line. To ease this issue, the state set up a funding floor for the retail locations, where iGaming money is used to help make up for lost funds.

Another hurdle for a lot of states is getting the governor on board with things. Michigan originally passed a bill and went back over it overnight to get through language deemed problematic.

Concerns also surrounded impact on lottery

Similar to the brick-and-mortar casino issue, there are typically red flags for lottery providers when considering online casinos. The regulators on the call all emphasized that with the right tax structure, iGaming shouldn’t impact lottery sales.

They stated the actual revenue numbers can back this up. But many view lottery and online casino wagering as two very different entities. Of course, some people in every state overlap and enjoy both types of gaming. However, the implementation of online casinos doesn’t take a toll on the available funds for lottery.

The process of turning online casino bill into law

There’s no question that the process of getting a bill created and turning it into an actual law is difficult. The panel of Pennsylvania and Michigan reps also gave some advice on how other jurisdictions can utilize their prior experiences to help them moving forward.

Get lawyers to stop talking

One main yet relatively difficult component: keeping everyone in the room long enough. With so many lawyers and so much ground to cover, these meetings can sometimes become long and overwhelming.

Sen. Hertel highlighted that it is sometimes hard to get the lawyers to stop talking so that everyone else can get on the same page.

Have proper infrastructure in place

The group advised that having all of the infrastructure in place before launching anything for iGaming is crucial. Communication is one of the biggest parts of the entire process. It is necessary to have everything presented to all participating parties.

Fortunately for New York, such a framework exists thanks to the launch of online NY sports betting. As some regulators and industry experts agreed during a separate panel, that will greatly help NY online casinos across the finish line.

Do not forget about online casino education

Besides talking about every part of the potential launch, education is also key. Williams recommended putting money aside to utilize for staff training and other ways to learn. Sending staff to states where markets already exist should provide lots of information to assist in planning.

Again, New York is in a premier region to accomplish this, with Pennsylvania and New Jersey each with thriving online casino industries.

The former PA regulator said how she conducted a question-and-answer session with the Pennsylvania Gaming Control Board. By getting everything in line and outlining your regulations first, drafting a bill becomes much easier.

Places like New York don’t need to reinvent the wheel when it comes to iGaming, as it can look at lots of previous examples already in place. As Pennsylvania lawmakers used NJ, New York can do the same with lots of nearby locations. The staff at most of the active markets appear more than willing to help with whatever is needed.

Preparing for launch of NY online casinos

Getting ready to roll out a bunch of online casinos is certainly different than dealing with retail casinos. While the added technical elements might be obvious, there’s more for state lawmakers to consider.

One piece of advice covered the added extent of the audit trail that comes from online gaming. There is a lot more updating and maintaining of necessary records to understand security and all of the various transactions. Knowing the difference between the specific gaming acts and what rules apply to online gaming is very important before getting started.

It should also be noted that not every part of the process is difficult and stressful. After getting everything in place, there is a fair bit of revenue that should come from these online platforms.

Each of the regulators expressed how surprising it was when iGaming revenue started to come in and how it exceeded expectations. Online casino profits are much stronger than sports betting and they don’t appear to be slowing down, either.

So, states like NY that feature online sports betting but not online casinos need to reconsider their plans.

Plenty of plusses when it comes to NY online casinos

Launching a legal, regulated market for online casinos benefits all those involved. Residents receive protection by wagering with a legal platform that is supported and backed up by the state. Instead of risking their money with an illegal option that could steal their identity, bettors will finally have a trusted source.

Then, some of that money gets resurfaced back into the community and people of the state who need it. Michigan, for example, provides iGaming revenue to schools, firefighters who become ill, and increased awareness around problem gambling.

It’s clear that the Empire State has the ability to launch an iGaming market in the near future with slightly more ease than other places in the past.

Photo by Shutterstock / PlayNY
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Chris Imperiale

Chris Imperiale covers New York sports betting and NY casino gaming industries for PlayNY. He holds a journalism degree from Rutgers University and was formerly on staff at Bleacher Report.

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