New York will not be getting online gaming in 2023. But neither is anywhere else in the United States, according to a panel of industry experts.
Although legal online sports betting has spread to over two-thirds of the US population in less than five years, internet casino gambling has not kept pace. As shown in New York, where lawmakers have fervently attempted — and failed — to legalize NY online casinos. First made available in New Jersey in 2013, iGaming, or online casino gambling, is only available in six states.
That is unlikely to change any time soon.
“Here’s the reality — iGaming is dead in every state this year,” Howard Glaser, global head of government affairs and legislative counsel for Light & Wonder, told attendees of the 26th East Coast Gaming Congress in Atlantic City. “It’s not going to happen.”
Could NY online casinos be on deck for legalization?
However, the Empire State is a good bet to be the next state to legalize and regulate online gaming.
Sen. Joe Addabbo was scheduled to speak alongside Glaser and others on an ECGC panel titled “iGaming: Is 2023 The Year?” Addabbo stayed in Albany for budget hearings, but Glaser noted the state senator’s efforts to introduce digital gaming are further along than most other states, giving New York an edge.
Although the numbers are premature, some industry projections believe the state’s online gambling market could produce $2.5 billion to $4 billion in annual revenue.
“I would expect the largest IGaming market in the world to come online … in the next year,” Glaser said.
Who else could make a move for online gambling?
Indiana Sen. Jon Ford spoke to the conference via Zoom after spearheading an unsuccessful online gambling effort in the Hoosier State earlier this year. Ford said he and other pro-gaming advocates made headway among skeptical colleagues and expect a more favorable outcome soon.
“I think definitely next year looks very promising,” Ford said. “Here in Indiana, I think we’re going to have a good run at this. It’s probably going to be New York or Indiana that (goes) first.”
Indiana, which came close to passing online gaming legislation this year, and New Hampshire are also on the shortlist. Outside contenders include Nevada, Iowa and Illinois.
New Hampshire may move to legalize online gambling soon, but it won’t be an open market. Much like the Oregon Lottery runs that state’s online sports betting market, the lottery in NH would oversee iGaming.
March online gambling revenue numbers put other states on notice
As noted, six states feature legal online casinos: New Jersey, Pennsylvania, Michigan, West Virginia, Connecticut and Delaware. Nevada, meanwhile, permits legal online poker.
Coincidently, the panel took place just hours before Michigan announced a monthly online gambling revenue record of $171.8 million.
New Jersey and Pennsylvania also set records in March, with $165.7 million and $148.2 million, respectively.
Politics of gambling regulation
One Atlantic City panel expert noted that most state legislatures’ political makeup is a hurdle for online gaming legalization. According to West Virginia Delegate Shawn Fluharty, most state lawmakers tend to be older and more conservative, and the basics of internet gambling and its role as a complement to land-based gambling are unfamiliar concepts.
Fluharty, who is also the president-elect of the National Council of Legislators From Gaming States (NCLGS), said online sports betting was an easier sell.
“Sports betting is super popular (but) it sucks up all the oxygen in the room,” he says. “It’s not necessarily the most effective. It’s not necessarily what brings in the most money. But, it’s easier for politicians to have an appetite for it.”
New York sports betting is the largest US market, due to the launch of online sports wagering in 2022.
By comparison, Fluharty noted that three months’ worth of sports betting revenue equals one month of internet gambling revenue in West Virginia.
“The data doesn’t lie. IGaming is superior to sports betting,” he said.
Rule No. 1: Follow the money
The experts agreed that the turning point would be when state lawmakers realize the tax revenue potential of online gaming.
In New Jersey, a mature market with land-based and online gambling, tax collections from one segment far outpace the other. Through the first three months of 2023, online gambling taxes (excluding sports betting) have added $69.3 million to state coffers. Atlantic City casinos have paid $41.8 million in taxes from in-person gambling revenues this year.
Year-to-date, NJ has collected $139.5 million in gambling taxes, with $97 million coming from online forms of gambling. Those online tax figures are 19.5% more than in 2022, 40.5% higher than in 2021 and 330% more than pre-pandemic-2019.