Budget Negotiations Begin Regarding Legalization Of New York Online Casinos, Poker

Written By Mike Mazzeo on March 4, 2022 - Last Updated on March 10, 2022
NY Online Casino Budget Negotiations

Budget negotiations surrounding a bill introduced by Sen. Joe Addabbo to authorize iGaming in New York have begun.

Lobbying efforts have ramped up as well.

Lobbying firm iDEA Growth sent a letter to Sen. Majority Leader Andrew Stewart-Cousins on Thursday, pushing for the bill to be included in the one-house Senate budget.

“If enacted, this legislation would provide over $500 million in immediate and recurring annual tax dollars and also bring meaningful protections to New York consumers. We strongly urge you to include iGaming provisions in the one-house Senate budget,” the letter reads.

“I’ve never seen a smoother path to significant revenue production for the state in 30 years than in this bill,” Howard Glaser, global head of government affairs and legislative council at Light & Wonder (formerly Scientific Games), told PlayNY.

Legalizing NY online casinos, poker not an easy task

Jason Robins, CEO of DraftKings, said at the company’s investor day that it would be a “great win” if iGaming were to become legal in New York.

But even if the bill to legalize NY online casinos does get in the one-house Senate budget, it would still face an uphill battle.

“I think it’s going to be a really tough sell to get it done,” one industry source with knowledge of the process told PlayNY.

Asked what the odds were of the bill passing for this budget, a second industry source simply responded: “Low.”

Read More >> New York Online Casino Bill May Not Find its Way into New York Until Next Year.

Addabbo is always going to be an optimist on all gaming-related issues. But even he acknowledged that this is just a starting point.

“I wanted to get the conversation going,” Addabbo said. “And we’ll see how this goes over the next 3-4 weeks.”

Addabbo and Assemblyman Gary Pretlow are also looking to push through a bill that would enable fixed-odds horse racing and NASCAR to be included on NY online sports betting apps. The bill would also authorize the installment of kiosks at arenas, stadiums and kiosks in the state. In addition, local policymakers are looking to expedite the licenses for three downstate casinos that could bring an additional $2 billion to the state’s coffers.

Online casinos in NY would follow path of sports betting

But the state’s assembly has historically shown more resistance on gaming issues than its senate, with veteran members opposed to a physical casino existing in any of New York City’s five boroughs.

“It might suck up all the oxygen in the room,” the first industry source said.

“Too much, too soon,” the second industry source added.

Early in the negotiation process, a colleague brought up the possibility of a constitutional issue. But Addabbo sees no issue — especially given the legalization of online sports betting, which launched in the Empire State on Jan. 8.

“It’s actually a stronger constitutional argument than mobile sports betting was,” Addabbo said.

State regulations allowed for mobile sports betting so long as one of the four upstate casinos housed those operators’ servers. Online casino gaming — which includes blackjack, roulette, slots and online poker — would follow in a similar fashion.

“Gambling takes place at where the server is because that’s contract law — where it is accepted. So, therefore, once the server is on the land of the licensed casino, we’re fine,” Addabbo said. “It’s easily refuted with the same argument that we used for mobile sports betting. And even more so because it’s gambling — and we approved gambling in 2013.”

Election year also poses problems

Still, the iGaming bill could face opposition in what is an election year. Not everyone supports more gambling vices, which could lead to more addiction issues. Although the bill does call for an additional $11 million for problem gambling services.

“The bottom line is we can do this safely with all the safeguards in place,” Addabbo said. “It’s a great conversation to have.”

The bill does include tribes. The initial thought is they’ll be on board, just like with the online sports betting bill. But their exact feelings on the matter are unclear. Concern also surrounds how online slots, for example, could impact existing video lottery terminals (VLTs) and racinos. The belief, though, is all entities can thrive in the marketplace.

If now this year, 2023 could see NY online gaming expansion

The state’s annual budget plan is due April 1. Whether it will include iGaming remains to be seen. But at least the conversations have started. And even if it isn’t this year, there’s always 2023.

“From iDEA’s standpoint, we support it being included. We believe it could create a significant revenue stream, and more importantly, provide the consumer protections that are now available for sports bettors but not for others who like to play casino games online and poker.” John Pappas, state advocacy director for iDEA Growth, told PlayNY.

“Whether we’re successful this year or not, we believe it’s important to have the discussion. And we’re never going to shy away from advocating for the merits of it as we have in other states and will continue to do it.

“New York is a major trend-setter for other states. It’s not tempering our enthusiasm, but we’re also going to be realistic that if it doesn’t happen this year we’re gonna take another bite at the apple, pun intended, next year.

Added Glaser: “No one even had New York (iGaming) on their scorecards. This is a great opportunity to make some great progress for the industry.”

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Mike Mazzeo

Mike Mazzeo is a contributing writer for PlayNY, reporting on legal sports betting in New York while covering the potential legalization of NY online casinos and poker. He previously wrote for ESPN, the New York Daily News and The Ringer, among others.

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